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FINANCIAL TIMES 


Argentina: pressure 
. grows for economic 
change. Page 8 


0 


No. 30,382 


EUROPPS BUSINESS NEWSPAPER 

Friday November 6 1987 


D 





World News 


S Africa 
releases 
veteran 
ANC leader 

Black nationalist leader Govan 
Mbeki, 77, jailed 23 years ago 
for plotting to overthrow the 
South African Government, was 
released from Robben island 
jail off Cape Town. 

Bis release followed a review 
of his case ordered by President 
P.W. Botha. Asked to define his 
present political position, 
MbeU said he was still a com- 
munist and still embraced 
Marxist views. Page 28. 

Extra $3.2m for 
Contras approved 

The US House of Representa- 
tives approved $3l2xq of new, 
□on-lethal aid for Nicaragua’s 
Contra rebels on the day that 
foreign aid to. insurgencies in 
Central America was due to end 
under a regional peace plan. 

Meanwhile the Contras said 
they would step up their war 
against the Nicaraguan Govem- 
ment until the two sides negoti- 
ated a ceasefire. B*«gn» to seek 
Contra aid. Page 8 

Santiago blacked out 

Leftist rebels claimed responsi- 
bility for bombs which briefly 
blacked out Ranting** and much 
of central Chile. 

Bridge loanfbr Brazil 

BRAZIL’S leading creditor 
banks are discussing a bridge 
loan in negotiations in New 
York which have been contin- 
uing for nearly two weeks to 
partially end Brazil’s eight- 
month-old interest payments 
suspension. Last' night bankers 
said that the twonides were still 
divided!*. Korean debt talks. 
Page 28 

Schoolboys’ war 

Some 150,000 Iranian school- 
boys fought on the Golf war bat- 
mi last 


Business Summary 


Telex plans 
to raise 
$878m in 
junk bonds 

TELEX, beleagured US maker 
of computer- peripherals and 
airline res ervati on systems, no- 
veiled an $87Bm recapitalisa- 
tion plan as insurance against 
the failure of a higher offer 
from Mr Asher Edelman, the 
New York investor. Page 29 

RALPH INGEBSOLL, US pub- 
lisher, has bought a controlling 
interest in two UK newspapers 
in a deal worth more than £80m 
($105m).Page29 

LONDON: Traders reacted with 
cautious optimism to moves to 
lower interest rates in the US 


FT Indices 






800 


October t9B7 November 


it year - and provided . 
the best frontline 


tlefiront 
some of. 
troops - Iranian Education Min- 
ister Katem Akrami said. UN «#-• 
farts Usmfned, Paged •. 


French missile plea 

France appealed for .the US to 
keep nuclear weapons In Bis* 
rope, . revealing fears over the 
course of superpower disarma- 
manet talks. Page 3 

SDI compromise near 

White House officials and con- 
gressional negotiators were 
close to an agreement under 
which the US Administration 
would limit Strategic Defence 
Initiative testing in the 1868 fis- 
cal year so as not to breach In- 
terpretation of the 1872 Anti- 
Ballistic Missile treaty. Page 8 

Spanish tomato demo 

Spanish formers protesting 
against restrictions on tomato 
exports to France brought Mad- 
rid traffic to a standstill when 
they blockaded a main square 
and dumped tomatoes in front 
of the French embassy. Peace 
talks, PageX 


and West Germany. The FT-S3S 
IQOl index closed a net 30.7 
higher at L638JB. Page 4C 

WALL STREET: the Dow Jones 
industrial average closed up 
40.12 at 1865.41. Page 58l 

TOKYO: The yen’s strength 
against the dollar and foils on 
overseas stock markets polled 
down share prices across the 
board. The Nikkei a 1 
closed 430.88 lower 
Page 58. 

DOLLAR closed in New York at 
DM L8770; Y135.05; SFrL3710 
and FFr5.6780. It closed in Lon- 
don at DML7150 (DML7120); 
Y137.35 - (YJ37.05); SFrL4130 
(SFrt.4150); . FFr5.83 

(FFriU050). On Bank of England 
figures, the dollar’s exchange 
» Index rose- from BSD to 88. L 


rate 

Pages* 

hnR mJBi gcIoged in NewYork 
at $L779Q. It closed in London at 
$1.7415 ($1.7390); DMR9875 

(DM28775); Y23825 (Y23R25); 
SFr24600 (unchanged) and at at 
FFrlO.1525 (FFr10.0850). Page 
39 

NOK8K HYDRO, partly state- 
owned Norwegian energy and 
industrial group, has purchased 
the remaining 20 per cent stake 
in Co fox, the French fertiliser 
company, from joint owners To- 
tal, the French oil group, Fari- 
■ has; the French bank and 
Rhone-Poulenc, the diversified 
chemicals group. 

SICS, Milan-based investment 
bank and one of Italy’s most im- 
portant lead-managers of new 
share Isbubs. is to postpone four 
company debuts on the bourse. 
Page 38 

HYDRO-QUEBEC, Canadian 
electric power utility, earned 
C$362m (US$ m) in the first nine 
months, up from C$C3 m a year 

earlier. Page 2$ 

LIBERAL-DOMINATED Senate 
In Ottawa is expected to end its 
blockade of the Mulxoney Gov- 
ernment’s patent drug bill after 
months of attempts to change it 
Page 28 

DA1WA HOUSE Industry, one of 
Japan’s largest home builders, 
boosted pre-tax profits 60 per 
cent in the first half to Septem- 
ber to reach Y1529bn <$1125m) 
compared with Y9.61bn. Page 31 

CHINA LIGHT and Power, Hong 
Kong electricity generating 
company, reported after-tax. 
profits for the year to Septem- 
ber of HK$L67bn (US$214,111]), a 
13 per cent- improvement on 
profits a -year earlier of 
HK$L47bn. Page 31 

HONGKONG LAND, leading 
Hong Kong property group, un- 
veiled plans to redevelop one of 
the (tew remaining sites at. the 
heart of the Central financial 
district - number 9 Ice House 
Street - for about HK$lbn 
(US$12&2zn).Page31 

ISH I KA WAJIMA-H Asnc A 

Jayewardene In India 

President Junius Jayewardene nearing group, reported a sharp 
of $ri began a two-day reduction in interim . tosses, 

visit to India. Page 4 Page SI 


Airline workers fast 

More than 130 South Korean 
employees of Northwest Air- 
lines went on hunger strike to 
urge the US carrier to start 
talks on better job security. 

Beirut strike 

Strikers closed Beirufs banks, 
offices and shops in protest 
against 12 years of civil war, 
crippling infl ation and the Gov- 
ernment’s failure to bring 
peace and stability. 

Haiti ballot blaze 

Arsonists destroyed the print- 
ing company preparing ballots 
for Haiti’s presidential election 
later this month. Election con- 
trols spark violence. Page 8 

Greek students protest 

About 15,000 Athens University 
students staged a demonstra- 
tion in the centre of Athens de- 
manding increased spen din g on 
education. 


US prepared to risk further fall 
in dollar to avoid recession 


BY STEWART FLEMING IN WAStflNGTON AND ROOEFBCK ORAM IN NEW YORK 


THE white HOUSE yesterday 
signalled that it is ready to risk 
a further foil in the value of the 
dollar on the foreign exchange 
markets in order to avoid a re- 
cession. 

On Wall Street, this con- 
firmed market participants’ be- 
lief that the US Administration 
had decided on the trade off be- 
tween the dollar and monetary 
policy. For more than a week, 
foreign exchange dealers have 
been aggressively selling down 
the dollar, and its decline con- 
tinued yesterday. - 

Stock and bond markets ral- 
lied -strongly as the worldwide 
trend towards lower interest 
rates was reinforced at home by 
a one-quarter point cut in 
banks’ prime rate and abroad, 
by lower central bank rates in' 
West Germany and Switzerland. 

The first public signs of a shift 
in US policy came in an inter- 
view with Mr James Baker, US. 
Treasury Secretary, published' 
in the Wall Street Journal yes- 
terday. White House spokesman 
Mr Marlin Fitzwater, said, "he is 
our chief economic spokesman. 
Those comments do reflect the 
Administration’s position.* 


"We certainly want to avoid a 
recession. We believe that we 
will do that, that the markets 
will stabilise and an appropri- 
ate degree of confidence will 
return to the market situation.” 

In the newspaper interview 
Mr Baker is quoted as saying he 
wanted to ”make sure” that the 
Federal Reserve kept”snf!lcent 
liquidity in the system.” The re- 
port also said that ”Mr Baker 
emphasised that he is not going 
to fay to maintain ranges for the 
dollar at the expense of US 
monetary policy.” The report al- 
so said that Mr Baker believed 
“that tight monetary policy and 
rising interest rates contributed 
to the (stock) market plunge” on 
October 19. 

Later Mr Fitzwater added to 
his comments that “the US re- 
mains committed to the Louvre 
agreement and will continue 
co-operating closely with its G7 
partners to foster exchange rate 
stability-" But Mr David Mul- 
ford. Assistant Secretary for In- 
ternational Affairs at the Trea- 
sury, told a Congressional panel 
that he thought the Louvre Ac- 
cord had been misunderstood. 
Stablising rates did* 


not mean taking a particular 

rate and attempting to keep it at 

that level through the use of 
policy measures aimed at pre- 
venting movement, he said. 

While careftally avoiding di- 
rect criticism of West Germany, 
he added, ”tn view of" the lack of 
evidence of growing inflation- 
ary pressures” it was important 
for the world economic outlook 
that central banks in countries 
with current account surpluses 
stuck to their recent decisions 
to lower short-term interest 
rates and give "renewed consid- 
eration to the possible scope 

for further fiscal actions to gen- 
erate improved growth consist- 
ent with the gains 

on inflation that have been 
made.” 

Shortly after the markets 
opened yesterday, in moves 
which maywellhave been influ- 
enced by Mr Bator's comments 
favouring a continuation of the 
easy monetary policy the Feder- 
al Reserve instituted to main- 
tain market liquidity after Wall 
Street’s crash, a group of major 
US banks led by Chase Manhat- 
tan cut their prime rates by one 
quarter of a percentage point to 


Currency declines despite 
European interest moves 


BY SBION HOLBERTON M LONDON 


WEST GERMANY and Switzer- 
land yesterday cut their official 
interest rates as European and 
Japanese central banks 
launched an unsuccessful at- 
tempt to stabilise the dollar on 
foreign exchanges. 

The dollar lost more than 2 
per cent of its value against ma- - 
jor .currencies ' in European - 
trading in the wake of US gov- 
ernment indications that it 
wanted the dollar to find its ■ 
own level. ■ -• - 

The dollar foil to' an all time 
low againsttheyen despite mas- 
sive intervention, reported to 
be about $L5 bn, by the Bank of 
Japan, ana ha the foee ofthe Eu- 
ropean Interest rate cuts. 

The Bundesbank said it cut 
some of its key interest rates to 
support the dollar and ease 
strains within the European 
Monetary System, although it 
left its discount rate un- 
changed. 

In a concerted attempt to 
shore up the EMS exchange rate 
mechanism, the Bank of France 
raised official interest rates, 
taking some pressure off the 
franc. 

In a joint statement, Mr Ger- 
hard Stoltenbere, the West Ger- 
man Finance Minister, and Mr 
Edonard Balladur, his French 
counterpart, said the ch a n g e s 
would help stabaliae the E M S. 
and be seen as a 'contribution 
to the promotion of stability on 
the foreign exchanges arid other 


financial markets in a wider in- 
ternational context” 

The Dutch central bank, 
which had cut its discount rate 
on Tuesday, also said its deci- 
sion was part of the co-ordi- 
nated move to lower European 
interest rate levels and pre- 
serve existing EMS parities. 

In New York, however, lead- 
ing US banka reduced prime 
lending rates by 025 perc en tage 
points to 0ft per cent which 
may efbet effects of the Europe 1 
an action -to lower intraBst 
rates. 

The UK Government’s deci- 
sion to lower the base lending 
rate on Wednesday was not part 
of the concerted action and re- 
flected domestic concerns. 

The base rate reduction 
foiled to dampen the pound, 
which continued to rise on the 
foreign exchange markets. 

It was the reported statement 
ofMr James Baker, the US Trea- 
sury Secretary, that he was not 
prepared to see US interest 
rates rise, and therefore risk a 
recession, to defend the dollar, 
which sent the US currency 
. lower. 

ite House confirmation of 
Mr Baker’s remarks as US gov- 
ernment policy farther under- 
mined tibia currency in early 
New York trading. 

The Bundesbank cut its "re- 
po,” or repurchase rate, from as 
per cent to 3.5 per cent, and also 
trimmed its Lombard rate from 


Dollar ta Unfan 

against the D-Mark dm pars 
IBS 



it rate unchanged at 3 
percent 

The Bank of France lifted its 
mpney market intervention rate 
frpm 7ft per cent to 8ft per 
cent, and raised the seven-day 
repurchase rate from 8 per cent 
to 8.75 percent 
The immediate effect was to 
strengthen the franc slightly in 
terms of the D-Mark. The inter- 
est rate realignment took some 
of tiie pressure off the franc, but 
French Finance Ministry offi- 
cials said the meas u re would 
last only in the short term if the 
Continued on Page 28 
Details, page 3; Inter na tional 
bends. Page 32; Lex, Page 28 


FBI arrests fugitive broker 
as Bonn delays VW sale again 


BY ANDREW R8HER1N FRANKFURT 


MR JOACHIM SCHMIDT, the fu- 
gitive West German foreign ex- 
change broker sought in con-, 
nection with the currency fraud 
at Volkswagen, has been ar- 
rested £zi the US. 

Following a seven month 
search, the 39-year old Frank- 
fort broker was found late on 
Wednesday night in an apart- 
ment in the Los Angeles suburb 
of Hollywood, according to the 
West German Federal Criminal 
Office. 

The news of the arrest coin- 
cided . yesterday with an an- 
nouncement from Bonn that the 
West German Government was. 
to postpone yet again the sale of 
its remaining shares, in Volk- 
swagen following the setback 
for world stock markets. 

. Fraudulent currency dealings 
at VW. which came to light in 
March forced the ear producer, 
to make provisions of DM473m 
C$278m) in its IMS accounts. 

Mr Schmidt was detained by 
the Federal Bureau- oflnvesti- 
gation, with German criminal 
officials present German offi- 


cials will request his extradi- 
tion under treaty agreements 
with the US. 

The currency scandal has al- 
ready led to the arrests of Mr 
Burfchard Junger, VWs former 
chief foreign exchange dealer, 
Mr Lutz Quaquil, another VW 
dealer, and a third unnamed 
currency trader at the company. 

Police have also investigated 1 
a- secretary of Mr Karl Otto 
Poehl, president of the Bundes- 
bank. on suspicion of passing 
documents to Mr Schmidt for 
money. 

VW made - provisions of 
DM473m in its accounts for 1988 
to cover the fraud losses. It said 
this week, when announcing a 
&5 per cost rise in profits for 
the first nine months to 
DM393m, that the emergence of 
farther foreign exchange losses 
of DM15m did not necessitate 
the setting aside of farther 
sums. 

The Government had already 
deferred its plan to sell its 40m 
VW shares (carrying 2) per cent 
of voting rights) because of the 


currency fraud. But two months 
ago, Mr Gerhard Stoltenberg, 
the Finance Minister, said the 
sale might take place this year 
Mr Stoltenberg had been hop- 
ing that the proceeds of the VW 
sale could be used to help fi- 
nance this year’s budget deficit 
Yesterday, however, nis minis- 
try said that developments on 
the stock market had led to a 
farther postponement 
The collapse in the VW share 
price in the past few weeks 
means that the Government’s 16 
per cent shareholding now has 
a market value of less than DM 
L3bn compared with DU L8bn 
at the end of September. 

The Finance Ministry said the 
Government still wanted the 
share disposal to occur ’as soon 
as possible”. But this would 
have to be at a time that was 
right for the market 
vTesterday, VWs share price 
eased farther by DM2 to DM262. 
At the end oflast year, it stood 
at DM427 and. was at DM384J0 
before the present turmoil in 
world stock markets started. 


■CONTENTS" 


Europe — 

CwanwUtiM 


Companies — 

America. 

**u ■ CmrcaciM 

■ 38 

28 

Companies 

Overseas — ............... 

Companies 

29 Bnwtanfe 

a Kara-spU—s — 

31 Grid 

..—.....,43 

1 42 
38 

—31 


World Trade. 
Britain 


Companies. 


.9,11-16 

™34*6 


Letters. 
Lex. 


-32 


-27. 


Management. 


-M 


Mourn* Matter*. 
Mosey Markets— 
Ba* Materials 


.18 

- 2 * 


.38 


Agriculture. 
Arts -Reviews. 


tfJS 


World Guide. 
Commercial Law— 


Stack motets -Bonnes. 
-Wall Street. 
-La 

Teelunlagy. 

Halt Trusts. 

Weather 


-38 



40-43 


.28 


.17 World lades. 


S KOREA’S 
ELECTION 
HOPEFULS 
TAKE TO THE 
HUSTINGS, 


ft pamlwg glints have been made to find 
A successor to PresidentChnn Doe 
Hwan,Page2 


Netherlands: rational voice is heard .. 2 

Britain: pupils discover space ... 9 

Management: City of London firms’ 
8ystems long way from perfection 18 


air forces: dogfight between 
iends — 26 


good 

Editorial comment: Mr Lawson's op- 
tions; protection of copyright .... 26 

lat- BP; interest rates. Storehouse .. 27 

Urban renewal: survey section HI 

FT 560: survey section IV 



point 
had i 


Treasury Secretary James Bak- 
er: fine signs of shift 

8% per cent. 

US investors, eager to lock in 
yields before they fell farther, 
bid aggressively for bonds, 
which drove prices up and 
yields down. The Treasury’s 
benchmark &75 per cent 30-year 


bond rose 1ft points, cutting its 
yield to 8.79 per cent The prime 
rate cut had been expected be- 


cause of the rapid foil recently 
in banks’ cost of foods. 

Some analysts were disap- 
' i ted, however, that the cut 
not come earlier and was 
only ft point They said a half 
point cut had been justified by 
key interest rates such as on 
Fed fluids and Eurodollars. 

Stocks overcame a small dip 
at the opening to rise rapidly on 
the back of lower interest rates. 
The market was encouraged by 
the explicit statements from Mr 
Baker and the White House that 
the Administration was willing 
to let the dollar foil to help 
stave off a domestic recession. 

Dealers were disappointed 
that the Bundesbank had not 
cut its discount rate but said the 
dollar would probably have 
fallen just as much an yway . 
’Baker’s remarks mean thdre Is 
not a forseeable bottom for the 
dollar in sight,” a New York 
trader said. 

Near the close of trading the 
Dow Jones Industrial Average 
was up more than 50 points, but 
it eased slightly as it once again 
ran into difficulty breaching the 
jisychologicaUy Important 2,000 


Commons clash on 
UK-US relations 

BY PETER RDDBX, POUT1CAL EDITOR 


A MEETING of the Group of 
Seven industrial countries will 
be held to discuss co-ordinated 
international action, including 
possibly lower interest rates, 
out only after the US adminis- 
tration and Congress- have 
agreed measures to reduce its 
budget deficit, Mr Nigel Law- 
son, the British Chancellor, of 
the Exchequer, wild last night 

He was speaking during a 
rowdy parliamentary debate on 
the economy during which 
there were repeated angry ex-- 
changes between Mr Lawson 
and Mr John faiWy Labour’s . 
Shadow Chancellor, and Mr 
NeU Kinnock, the Labour lead- 
er. 

Labour argoed that there was 
a conflict between Mr Lawson’s 
strongly worded warning: in a 
recent speech to the US about 
reducing Its budget deficit and 
an allegedly softer cable sent 
on Wednesday evening by Mrs 
Margaret Thatcher, the Prime 
Minister, to President Reagan 
personally . Mr Kinnock raid 
this was to mitigate the impact 
erf tiie Chancellor's speech. 

The official expanatfon was 
that Mrs Thatcher's cable was to 
give "support and encourag- 
menP to the President in his ef- 
forts. Mr Lawson told MPs that, 
while the words were different 


BP share buy-back 
begins In low key 

Offer to British investors to 
bay-in BP shares starts today. 
Bat the Bank of England hopes 
to avoid widespread take-up of 
the offer hy small investors. It 
Will buy shares back direct, 
cutting out deaUngcosta, taxes 
and duties. A low key newspa- 
per advertising campaign is to 
be aimed at what the Bank 
calls "the more sophisticated 
Investor”. . . . 


from his speech, the message 
was the same.” 

During the debate Hr Lawson 
said further reductions in inter- 
est rates were *a distinct possi- 
bility” as part of such an inter- 
national package. This would 
include both measures on the 
monetary front and structural 
action to Improve the perfor- 
mance of various economies, 
under the terms of last Febru- 
ary’s Louvre accord. 

He repeatedly stressed that 
such an international package 
had to be based on the uS put- 
ting its house in order as soon 
as possible. The US measures 
should involve action to reduce 

Continued on Page 28 


Fiat calls 
off telecom 
merger 
talks with 
Italtel 

By Alan Friedman In Milan 

ITALY’S Fiat group yesterday 
announced its decision to with- 
draw from the planned merger 
of its Telettra telecommunica- 
tions subsidiary with Italtel, the 
larger telecoms company owned 
by the IRI-Stet state holding 
concern. 

The move shocked both Ital- 
ian financial and political cir- 
cles. A Republican member of 
the chamber of deputies has al- 
ready demanded that a parlia- 
mentary inquest is held to dis- 
cover who was responsible for 
the foiled merger. 

The Fiat decision marks the 
end of two years’ negotiations 
between the Turin private sec- 
tor conglomerate and the 
Rome-based state industrial 
group. 

The talks were aimed at creat- 
ing Telit, a unified Italian tele- 
coms group, which would have 
had combined sales of around 
$L5bn. Telit, which was to have 
been 48 per cent owned by Fiat, 
48 per cent by IRI-Stet and 4 per 
cent by Mediobanca, the Milan 
merchant bank, was described 
by both sides as an essential 
strategic move to reach the crit- 
ical mass needed for the Italian 
telecommunications industry to 
secure a further international 
joint venture in order to com- 
pete on the European and world 
market 

Fiat said In a terse one-sen- 
tence statement Lhat, 'with sor- 
row and bitterness,” it had in- 
formed Stet that it was 
renouncing the joint initiative 
in the fece of what Fiat called: 
"persistent behaviour that con- 
tradicts fundamental agree- 
ments reached between the par- 
ties on the essential outlines for 
the operation of Telit* 

Fiat, Italy’s biggest private 
sector group, explained later 
that the stumbling block had 
been the nomination of Mrs 
Harisa BaUisario, Italtel man- 
aging director, to the same posi- 
tion at Telit 

"The nomination was made in 
September unilaterally and 
without our consent Now, after 
a month of attempted media- 
tion, the nutter has still not 
been resolved and we feel there 
has been an infringement of the 
pacts,” the company said. 

IRI-Stet last night issued a 
statement rejecting *in the fir- 
mest manner, the accusations 
by Fiat of having violated any 
agreements'. 

Last month IRI maintained 
that the choice of Mrs Bellisario 
was in line with an agreement 
that Fiat would choose the Telit 
president (who was to have 
been Mr Rafeele Palieri of Te- 
lettra) and IRI-Stet the manag- 
ing director. 

An IRI official last night de- 
nied that the choice of Mrs Bel- 
lisario had been political (Mrs 
Bellisario is a Socialist). 



The government 
will shortly 
revalue your 
premises. 

Guess what could 
happen to your 
rates bill. * 


The forthcoming revaluation of business premises 
throughout the UJL is gening under way. 

New rates for your premises will be assessed largely 
on the basis of rental levels as at April neta year. 

Hfllier Parker’s unique database of business 
rents is the most comprehensive available. 

Call Philip Redman or John Devereux and find out 


* 


Hillier 

Parker 

01-629 7666 

71 Gnranr Sum LoUm W tt an* 




*k 


V 


: J 




EUROPEAN NEWS 


Financial Times Friday November 6 1987 


W German 
orders fall 
4.3% in 
September 

WEST GERMAN manufacturing 
orders provisionally fell by a re- 
al, seasonally-adjusted 4.3 per 
cent in September after a down- 
wardly revised 6.5 per cent rise 
in August, tlie Economics Minis- 
try said, Reuter reports from 
Bonn. 

The ministry last month said 
that August orders had risen by 
a provisional 7.4 per cent 
The orders Index (base 1980 
and expressed in volume terms) 
stood at a provisional 2Z0 in 
September, after 115 in August 
revised from 116, and 108 In Ju- 
ly- 

The Economics Ministry said 
domestic orders had fallen by 8 
per cent in September from Au- 
gust after an 11 per cent rise 
the previous month, while for- 
eign orders were unchanged af- 
ter a previous 5 percent rise. 

It described the August rise 
in orders as extraordinarily 
strong and said ft was influ- 
enced by special factors. 
According to statistics from 
the Bundesbank, the West Ger- 
man central bank, the orders in- 
dex stood at 108 in September 
last year, producing a year-on- 
year rise of 2.9 per cent 

Belgrade quit call 

A Slovenian trade union organi- 
sation has demanded the resig- 
nation of the Yugoslav Govern- 
ment because its proposed 
anti-inflation austerity package 
is unacceptable, state newspa- 
pers reported yesterday. APre-i 
ports from Belgrade. 


The Dutch have gone further in advocating price cuts in cereals than Brussels, Tun Dickson reports 

Rational voice of the Netherlands makes itself heard 


THE Dutch may only have a 
small voice in Europe but it de- 
serves to be heard loudly in any 
discussion of farm policy re- 
form. 

After all, the Common Agri- 
cultural Policy was modelled 
partly on Dutch lines: no fewer 
than three European Communi- 
ty commissioners, for agricul- 
ture (including Mr Sicco Man- 
sfaolt, the original architect of 
the CAP, and the present in- 
cumbent Ur Frans Andriessen) 
have hailed from Holland. As 
one experienced diplomat from 
another member state candidly 
put It this week: The Nether- 
lands is the country which prob- 
ably comes closest to having a 
rational approach to the future, 
of European agriculture.* 

A rational approach (it is safe 
to assume this means much low- 
er guars c teed prices) is not 
likely to prevail in the crucial 
negotiations now taking place 
between EC fhrm ministers on 
the Commission's wide-ranging 
proposals to stabilise agricul- 
tural spending. But if the atti- 
tudes of France and West Ger- 
many in the north and the 
tactics of the Mediterranean 
bloc in the sooth will ultimately 
determine the extent of this 
round of GAP reform, the view 
of the Dutch may well carry 
more weight than their modest 
number of votes in EC Council 
meetings would suggest 

"They act as honest brokers In 
a number of areas and what 
they say often influences the 
outcome of a debate,” the same 
senior diplomat explained. 
"Given the history of the CAP 
they see themselves as the unof- 
ficial guardians of the policy.” 

From Mrs Thatcher’s point of 


view it Is also significant that a 
net^recipi ent ^of JSC ^badgetarp 

so complaining vociferously 
about the spiralling costs of the 
CAP - estimated at more than 
EeuZTbn (&&36ba) for this year, 
against a 1987 budget of just; 
Ecn23bn. Indeed Mr Gerrft 
Braks, the Dutch Agriculture 
Minister, has gone flixther in ad- 
vocating sharper cats is cereals 


The secret of this success lies 
in the Netherlands’ intensive 
fanning methods - baying feed- 
staffs at cheap prices on world 
markets and the highly concen- 
trated use of fertilisers - plus a 
shrewd application of computer 
technology to animal husbandry 
and crop management Proximi- 
ty to ports like Rotterdam offers 
a key competitive advantage. 

Efficient production methods 


The spiralling costs of the Common Agricultural Poli- 
cy threaten to undermine the European Community's 
attempts to provide a sounder basis for its future fin- 
ancing, the central issue at the heads of government 
summit in Copenhagen on December 4-5. In the third 
of a series of articles from national capitals, we look at 
the political, economic and social factors influencing 
individual governments on the farm issue 


and other prices than Brussels 
itself has so £ar proposed. 

His argument that lower 
' :es are justified at a time of 


ow inflation and falling feed 
costs is certainly sound, but he 
knows also that Dutch farmers 
are more capable of absorbing 
the additional pain than most of 
their counterparts. 

Dutch agriculture since the 
Second World War has become 
a byword for super-efficiency. 
With only 2m hectares of farm- 
land, 130,000 farms and an aver- 
age unit size just half the 
French norm, the Netherlands 
has become the world's second 
biggest farm exporter after the 
US and la dairy, poultry and 
horticulture it is the biggest. 
Three-fifths of total agricultural 
production is sold beyond the 
Dutch border - trade worth 
Guilders 49bn (£14^6bu) a year 
at the last count 


go a long way towards explain- 
ing why the Dutch have learned 
to live with EC milk quotas, 
even if they still baulk at the 
pr in ciple of supply controls and 
young farmers, complain about 
the upward pressure on land 
prices. The imposition of quotas 
for each member state in 1984 
spurred the Dutch into further 
improving their yields, reduc- 
ing costs and maximising profit 
to the extent that in the early 
days many farmers were able to 
pay the supposedly penal su- 
perlevy and still make a return. 

Last December's decision to 
cut quotas by another 10 per 
cent has admittedly caused se- 
rious adjustment problems for 
dairy farmers in the Nether- 
lands, but the high and as yet 
uncut guaranteed milk price is 
a rich reward for the many 
farmers that can survive the 
tighter regime. 


If sound structures have bear 
the Key to survival for the Dutch 
dairy sector and for growers of 
the so-called free products such 
as potatoes, onions and flowers 
which are not covered by an EC 
market regime (but which make 
up 60 per cent of the Nether- 
lands agricultural output), the 
same cannot be said of the cere- 
als sector (centre stage in the 
political negotiations). 

Cereals in the Netherlands 
account for leas than 2 per cent 
of production and just 10 per 
cent of land utilisation but 
those who depend for their live- 
lihood on the crop tend to be in 
the northern part of the country 
in areas such as Groningen, 
where the soil is not so suitable 
far alternative products: 

Bigger than average price 
cuts for cereals could upset the 
delicate balance between 
wheat starch and potato 
and could knock already de- 
pressed potato prices as har- 
der-hit farmers start to grow 
larger quantities of these and 
other products (a trend which 
some already suspect to be the 
result of milk quotas). 

In the absence of 
across-the-board price redac- 
tions, the Netherlands' main 
concern in the negotiations ap- 
pears to be to avoid this knock- 
on effect on other sectors. This 
is why Mr Braks is paradoxical- 
ly keen that spending Uni ts 
should sot be applied strictly to 
each product but should con- 
tain sufficientfiexibilily so 
underspending in one arable 
sector can be used to cover a 
higher-than-expected liability, 
in another. 

The indications at the end of a 
high level meeting of agricnl- 



NETHERLANDS 


tural experts In Brussels this 
week are that member states 
may eventually agree to a com- 
bination of modest mice cuts or 
Increases In the so-called co-re- 
sponsibility levy, pins some 
form of production restraint in 
an effort to stabilise the EC ce- 
reals harvest at the Commis- 
sion’s target of 155m tonnes. 

The principal Dutch concern 
is to avoid the introduction of 
national quotas In the cereals 
sector - a solution for which Mr 
Ignaz Kiechle, the West German 
Farm Minister, is strongly push- 
ing but which Mr Braks argues 
will be administratively com- 
plex, will fail to deal with the 
basic structural problem, and 
will create the much-feared 
knock on distortions in other re- 
gimes. 

The Dutch appear ready to 
swallow a Lana 'set aside” 
scheme on condition that it is 
not compulsory, that the com- 
pensation for those *»trtqg part 


is generous, and as long as the 
aim is not an across the board 
cut in land utilisation through- 
out the member states. 

Mr Braks 1 preference for dee- 
per price cuts is shared by most 
Dutch farmers (with the excep- 
tion of cereals producers), 
though the minister has been 
criticised fay the press and in 
parliament recently for being 
too soft on the Commission. Mr 
Marius Varekamp, president of 
the main farmers’ organisation 
the Landbeouwschap, accepts 
that action must be taken to 
control CAP spending but does 
not like the idea of production 
targets which are onilt into 
many of the new mechanisms. 

Whatever is resolved before 
the Copenhagen summit in ear- 
ly December is likely to arouse 
fewer passions over the long 
term than the environment, the 
main Dutch domestic preoccu- 
pation. With 15m tonnes of sur- 
plus, chemical-rich manure 
from the country's 5m cows and 
14m pigs (more than the human 
population), farm pollution is a 
huge problem, particularly in 
the south. 

Tough lavs place limits on 
the expansion of individual pi; 
producers in some areas as we) 
as imposing other controls. 
Dutch ingenuity in dealing with 
the challenge is not to be un- 
der-estimated but although a 
recent opinion poll showed so 
great popular hostility to far 
era - 90 per cent said that they 
would not mind if their daugh- 
ter married a farmer - some ex- 
perts fear this could change. 

Previous articles in the series 
a p peared on October 29 and No- 
vember* 


Pensions to rise in Portugal 


BY DIANA SHTH IN LISBON 

THE 2m Portuguese who re- 
ceive old age, disability or sub- 
sistence pensions have had a 
pre-Christmas bonus. Pensions 
and supplementary benefits 
will increase by 10 to 14.7 per 
cent on December L 
The Government forecasts in- 
flation of 6 per cent for 1988: In 
principle therefore, pensioners 
will have added buying power 
of between 4 and 7.7 per cent 
Portugal has had a spectacu- 
lar rise in numbers of pension- 
ers since 1975. Citizens who had 
no social security benefits un- 
der the old regime are now in- 
cluded in the system - not only 
the elderly, but hundreds of 
thousands of Portuguese who 
suffer from handicaps or are 


permanently disabled by road 
or work accidents. 

Although Portugal has Eu- 
rope’s highest growth in num- 
bers of pensioners, its wage and 
pension levels are abysmal, if 

monthly wage is now supposed 
to be Es26£00 CE 107) for indus- 
try and Es22,000(£91) for rural 
workers. However, many do not 
even earn this and, until the 
matter was brought to light 
some months ago, scores of 
small companies were using 
child labour for 10-12 hour days 
at Es8,000 a month or less to 
avoid paying rising minimum 
adult wages. 

The latest pension increase - 


the third given by Mr Anibai Ca- 
vaco Silva's government since 
1985 - raises disability or old 
age pensions from Esll,500 to 
EslAOOO a month. Pensions for 
rural workers rise from Es8£00 
to Es9,600 a month. 

With supplements for serious 
disability or old age, and subsis- 
tence supplements increased to 
Es4J40 and EsZ£00, a state pen- 
sion plus supplement could now 
yield a monthly £*17,300. 

Thanks to new legislation per- 
mitting the creation of pension 
schemes for private or public 
enterprises, employees who 
hitherto received no pension af- 
ter 30 years or more with a corn- 
can now look forward to a 
[old 


Soviet view of Prague Spring strikes chill 


BY LESLIE COLTIT IN BERLIN 

CZECHOSLOVAK officials 
have reacted with stony si- 
lence to remarks by a senior 
Soviet historian calling for a 
reassessment of the Soviet-led 
Warsaw Pact occupation of 
Czechoslovakia In August, 
196& 

Mr Georgi Smirnov, head at 
the Mar xis m- Leninis m Insti- 
tute of the Soviet Communist 
Party* said on Wednesday that 
It was time to "think over the 
•vents of U68.” 

While Czechoslovak party of- 
ficials declined comment, dip- 
lomats In Prague said the party 
leadership could only he dis- 
mayed. They pointed out that 
aay condemnation of the Inva- 
sion by Moscow would only 


weaken the position of the 
Czechoslovak leadership under 
Mr Gustav Husak which came 
to power in April. 1969. 

virtually anticipating Mr 
Smirnov’s remarks, the main 
Czechoslovak Communist 
newspaper. Rude Prims, In an 
interview last Monday with a 
Soviet correspondent, as k ed 
far Moscow’s evaluation of the 
doctrine of limited sovereign- 
ty* of Communist countries 
which was attributed to the 
late Soviet leader, Mr L eon id 
Brezhnev. This doctrine was 
widely regarded as having pro- 
vided the justification far Che- 
choslovakia's occupation and 
the -ousting of its reformist 
Communist leader* Mr Alexan- 


der Dnbcek. 

The Soviet journalist said 
the "so-called" Brezhnev doc- 
trine was a "legend invented 
and cultivated is the West.” 
Moscow's position, he noted, 
was given by Mr Mikhail Gar- 
lacker on a visit to Prague last 
AprlL 

Nr Gorbachev said then Chat 
relations b etw e e n C— IB 
countries were based on 
"equality* and the "indepen- 
dencer of each parly. No one 
had tiie right to claim a "spe- 
cial position' in the Commu- 
nist world, ho said. 

The Some leader reaffirmed 
his pesit i o n in a spee ch last 
Monday for the 70th anniversa- 
ry of the Soviet revolution. Be 


added that relations between 
Communist countries were 
governed by "socialist interna- 
tionalism,” a term appa rently 
replacing "proletarian interna- 
tionalism,’ which was widely 
used by Moscow under Mr 


Diplomats In Prague ex- 
pressed seme doubt that Mr 
Gorbachev would permit a rad- 
ically new appraisal of the 
eve n ts of 1988. Paring his visit 
to Prague and Bratislava last 
April, he was repeatedly asked 
by ordinary Czechoslovaks In 
the crowds for his views on 
what hvpr** 1 ** 1 In 1968. He re- 
plied that "you went through a 
difficult time and we were 
with yon." . 


France and 
Spain seek 
truce in 
tomato war 

BYDAV»WHT£MMA&KD 

SENIOR FRENCH anti Spanish 
trade official* are due to meet 
today in so attempt to impose a 
trace in the two countries' lat- 
est tomato war. 

The conflict over Spanish to- 
mate growers 1 difficulties in 
sending their produce to 
France flared yesterday morn- 
ing, when angry exporters used 
lorries to block central Madrid 
streets, offloaded tomatoes in 
front of the French endway, 
and brought traffic in the capi- 
tal to a virtual standstill 
The incidents threatened a 
repeat of a similar battle at the 
same time last year, which cul- 
minated with Spanish protest- 
ers blocking the main frontier 
crossing at La Jonquera in the 
eastern Pyrenees region. 
Exporters said they were pro- 


because of the *hostile 
attitude’ of the French Agricul- 
ture Ministry and the slowness 
of efforts by Spanish authorities 
to resolve the problem. They al- 
so complained that tomatoes 
from Morocco were receiving 
more favourable treatment on 
the French market 

Exports of tomatoes from the 
Spanish Mediterranean region 
to France are subject to a time- 
table and minimum price sys- 
tem. Like other Spanish fruit 
and vegetables, they do not start 
being integrated into the EC 
farm system until 1999. 

Mr Miguel Angel Fernandez 
Ordonez, Secretary of State for 
Trade, said the obstacles which 
France was putting in the way 
of Spanish tomatoes went de- 
void of economic sense", and on- 
ly benefited other countries. 


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Financial Times Friday November 6 1987 



EUROPEAN NEWS 


>i» 

*55. 

. . - 

■* ■ ■ . i 


INTEREST RATE CHANGES IN EUROPE 


Collapse of 

telecoms Double-vision at the Bundesbank 

u62l MOW . BYAIflmerFSi^MITtAMOHmT 

for Italy smb-km: asasagfflfflr 

wmmvnnr^jL ttons as itnrovMl J««terday to Germany and France, which ^ usual «rS^accSdTa8U- SS&KmwST 

SSSSi?SS!2^ li ‘ - cut interest rates. raised its shortterm rates te Sfidityhad been inESiS by SSftoJtoSf «LS 

INDUSTRIAL EDITOR To by to prevent what had help strengthen the franc, also SiMc^mStion and other 


tfona as it mover 
cut interest rates. 


yesterday to Germany and France, which 
raised its shortterm rates to 


any such r efi nan ci ng tnrongn expect fester decisions in US fi 
rtsvOTOl Trepo' accords, as U- SmeSl policy. If they have U 


Muscovites demand Paris urges 
information on u ? *? keep 
the fate of Yeltsin 

BY pahvckcockburnm MOSCOW r 


they have to 

sn their ner- THE CONTINUED reftual of 


■*..r 


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J’ :r J /-! 


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wcou^.of iuwsVl *«*»**. <*«™*"** 

tempts to bring together its two 
main indigenou s tele comm nni- 

cations equipment nuuiuhetor- 

ing companies could be a criti- 
cal blow to the Italian industry. 

Even together, the two busi- 
nesses would have been min- 
nows on the world scene and 
relatively w»ygin«l in Europe; 
alone, their ability to negotiate 
with the big players which are 
increasingly calling the shots in 
the rationalisation of the Euro- 
pean industry will be severely 
limited.. - 

For the past two years, the 
European producers outside 
Italy have been, waiting impa- 
tiently for the promised mar- 
riage between Italtel.'owned by 
the nationalised IKI-Stet, and 
Tehettra, a subsidiary of Fiat 
Any number of manufacturers 
have made their way to Turin 
for discussions; all have return- 
ed empty-handed because nei- 
ther Italian company wanted to 
do a unilateral deal 

It now . looks as though Italtel 
and Telettra will have to chose 
.their own partners individually 
- and their foreign competitors 
are likey to hammer home the 
point that tbey have less to offer 
a potential partner singly than 
together. • 

The Italian companies, like 
other significantly-sized manu- 
facturers in. Europe, are being 
forced into cross-border combi- 
nations because of the inexora- 
ble shake-out of manufacturing 


ith the advent of digital 
switching technology Europe no 
longer needs a great deal of its 
physical manufiudnring capaci- 
ty. Telephone exchanges have 
become- • giant computers, in 
which Car more of the invest- 

* Dd I Edouard BaUadur. the French on the Faria equity maxi 


Bundesbank actions. As for the 


▼otuness increases. | the i 

For the time being; the Bun- } viet 

ene< 



the authorities to-permit the So- 
viet press to refer to the threat- 
ened resignation of Mr Boris 
Yeltsin, the radical Moscow 
parly leader, has led to strong 
protests from Informal political 
clubs in Moscow. 

Mr Yeltsin threatened, at the 
meeting of the Communist party 
central committee on October 
21 , to resign in frustration at bu- 
reaucratic sabotage of reforms 
in Moscow. 

Mr Boris Kagarlitsky, spokes- 
man for the Federation of So- 
cialist Clubs, said yesterday: 
"Muscovites are learning about 
their own crisis on Western ra- 
dio. What is worse is that for- 
eign radios are quoting official 
Soviet information to which the 
Soviet people are denied ac- 



A remarkable aspect of Mr Yeltsin: will he lose 

Yeltsin’s offer to resign is that it his party pest 

has been confirmed by senior 
Soviet officials at news confer- 
ences in Moscow attended by for the retention of Mr Yeltsin 
Soviet and foreign journalists, ami for access to information 
but not a word of their remarks about the whole incident 


has appeared in the Soviet me- 
dia. 

The Soviet news agency Tass 


The move by the clubs, which 
tend to be radical ginger groups 


did run a report of what they for Hr Mikhail Gorbachev’s re- 
said but with a recommends- form programme of perestroika 
tion to Soviet editors not to (restructuring)^ important as 
print it an indication of the dismay felt 

The political clubs in by radical reformers that Mr 


an indication of the dismay felt 
by radical reformers that Mr 


Moscow, which have developed Yeltsin may be sacrificed by Mr 
rapidly over the' past year, are Mikhail Gorbachev. It is also a 


dismayed not only fay the fear sign of organised public opin- 
that Mr Yeltsin may go, but be- ion feeling that it has a right to 


cause they beiieve the issue is information and some influence 
an important test case of the over «-h«wgen within the leader- 
willingness of the Soviet leader- ship, 
ship to tell its own people what 

is going on. His fate is the first serious po- 

■We must finish with the infor- litical crisis to threaten pera- 
mation apartheid where for- troika. It will be decided at the 
eigners get information and we next meeting of the committee 

4*M,**> <nM U. IT. .U- » ~ k. 


FRANCE appealed yesterday 
for the US to keep nuclear 
weapons in Europe, sign a lling 
Its fears over the future course 
of superpower disarmament 
talks. Reuter reports from 
Paris. 

Mr Jean-Betnard Raimond. 
the Foreign Minister, recalled 
France’s commitment to nucle- 
ar weapons in response to what 
•he called 'ambiguity* In Wash- 
ington over the future of nu- 
clear deterrence. 

Mr Raimond told the Nation- 
al Assembly that Western Eu- 
rope could not rely on conven- 
tional weapons alone to 
balance the Soviet armed 
forces. 

Tt is not just because there 
are Imbalances In convention- 
al and chemical anus that 
American nuclear weapons 
must be maintained In Eu- 
rope,* he said. 

’It is also because the Soviet 
Union will remain for the fore- 
seeable future a nuclear power 
on our continent.’ 

Mr Raimond Indicated that 
Western Europe had little 
choice but to accept the super- 
power arms deal known as the 
double zero option, which calls 
for the scrapping of US and So- 
viet medium-range nuclear 
weapons. 

This was not so much a 
choice offered to the Western 
Europeans as the indication of 
a very strong preference by 
both Washington and Moscow.’ 
The deal will leave the US with 
short-range tactical missiles 
based in Europe, as well as 
bomber-launched nuclear 


Edouard Balladur, the French on the Paris equity m ar ket. 
Finance Minister, and Mr Ger- where the share prices of many 


software adaptation. - - 


don’t,' said Mr Kagarlitsky- He 
said that one club called Ob- 

■fn-liiim KuH voted tO 


triitsky. He of the Moscow ci: 
called Ob- lieved to be sched 
> campaign Monday. 


irty, be- 
for next 


Moscow is pressing for the 
accord to be followed by talks 
on scrapping the tactical weap- 
ons, which have a range of un- 
der 5M km. But Western Eu- 
rope opposes this triple aero 
option’. 


Z^OSSSKSaSS have dropped below their issue 

oil .JXi tile co-ordinated fall in West leveL 


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all imm) Mamr mnrfarfc unmn “«* wvnwHUca uui in west level. 

Shinto German central bank rates and The From* monetary author- 

Sarch rise in Bank of France interven- ities would have Ukedthe Bun- 

Hence tee Strive capture tion rates "Will contribute to the desbank to have moved sooner 
overseas sales outlets through 


tion rates ”will contribute to the desbank to have moved sooner 
stabilisation of exchange rates towards a reduction in its inter-' 


THE VOICE OF SOUTH AFRICAN BUSINESS 


takeovers and alliances. 

Forging these combinations is 


within the EMS and, beyond est rates, and officials stressed 
that, to the reinforcing of stab il- yesterday that they viewed the 


_ auonsis By in international foreign ex- moves as a temporary measure 

inevitably tortuous in Europe, f h» n » - until the US has acted to reduce 

where telecommunications pro- Wr Balladur started the pro- *** budget deficit, which they 
duction Is a political issue be- cedure with a formal letter to see as es s en tia l if the dollar to 
cause of the dose ties between jfj. stottenberg, ««fcing for the' to be stabilised. 

016 producers an dfoe state- application of the Nyborg Mr Balladur himself said that 

•GST"* 3 - L*i tile decision to allow shortterm 

nopoues. But the proce ss or . *fj ie moves widened -the gap rates to rise was a «<w> of his 

between Frenc h and W est Ger- wish for monetary stabSfty, but 
rates to that Udidnotraverae the jtener- 
*iesofdeal& ■ - nearly t&S percentage points; *i twtfWWwwlBIlrfW 

.< In the most significant of 
these, Alcatel of France has es- 
tablished itself as the leading 
European equipment producer 
by its <i"dng acquisition of the 
controlling interest in the tele- 

activities of TALKS between the European mittee of the European Pariia- 
F 1, *5-® J2 S Commission and Comecoa toes- ment that the Soviet Union still 

has effectively Jmocked one w tablish official rela ti ons are reftased to discuss trade Issues 
the majo r ve ndo rs ou t ortne stuck on the issue of the status with the EC, and 'continues to 
race, and given Alcatel a sttong o( West Berlin, European Par- make difficulties for the Com- 
position m West Germany as Uament members were told yes- munify in international organi- 
well as in France. terday. sations.* 

uvonM hail also hnrn nnptlv Mr Willy De Clercq, the Euro- Mr De Clercq was more opti- 

P®*® CoinmiBS1<Mi ® r Muponn- miatic than pessimistic about 
instrumental . in foe e merpenro ble ^ said no new talks were relations 

Planned until Comecon came He said the proposal for a 
wn toward with a new proposal on joint declaration by both the EC 
? n how to incorporate a "territorial and Comec on represented a 
claa4 ®' into the planned joint much more realistic method of 
France earlier to^ygy^givuig declaration, which would nor- establishing official relations 

malise relations between the ^ ttoimbitious umbrella 
two blocs. agreement proposed by Come- 

Italy and the UK. He warned the oolitical com- iSn in the laTO*. 


Mr Balladur himself said that 
the decision to allow shortterin 


that it < Md not rever s e theg ener^- 1 
ml trend to lower' medium- andj 


EC-Comecon talks stall 


terday. sations.* 

Mr Willy De Clercq, the Euro- Mr De Clercq was more opti- 
pean C ommis sioner responsi- miatic than pessimistic about 
ble, said no new talks were relations' 
planned until Comecon came He said the proposal for a 
forward with a new proposal on joint declaration fay both the EC 
how to incorporate a "territorial and Comecon represented a 


He warned the political comr con In the 1970s. 


agr eeme nt proposed by Come- 


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Synfuel programm 
scope for skilled 
black workers 


Michael Sander, managing firector of AEGl, talks to John ^ 
Spim, Finance Editor qf die Johannesburji Sunday Sqa: 


offer 









Spiraj'IbeSoufoAWcanecoooojyisbe- 
ghming to emerge bum three yean «f se- 
ven recession. In what sort of dtape is 
AECJattfab stage of the bnrinmqcfcg 


Sander: Our eanungt and general financial 
performance are generally one of the fin# to 
reflect an upturn and that’s been ibe case this 
tiinemund.AECI^typeon)iisiiiessistn£- 
tioDallyatthefroutMxioftiieecooonuccy- 
cfe~ That showed up g nb s hmri a lly a the end 
of last year and. just recently, weNe seen a 
further improvement at half term. 

I have to say that I don’t believe the econ- 
omy is as strong as many think h to be. Ws 
are seeing heightened consumer spending in 
onr business but (be economic growth iwe 
won’t be anywhere near 3 %fcy the end of the 

year. 

T\w> major factors can affect AECTs per- 
' fonnauce in the next few mouths. The first 
is the extent to which k rains, inso&r as this 
hDpacteupontteeanxii^ofooragrictdtui^ 
al actives, and the second is the levd and 
duration of labour unrest oo the mines. The 
demand for explosives and mining-rehded 
products is, of course, rather sensitive to 
labour disruption tm the mines. 

Spfra: AECFk receteeandngs gates ham 
nevertheless been highly satisfactory 
against the background of an eamotay 
which is growing only dowty hi red terms. 
Sander: When tones were tough, a lot of 
vrorkwem into streamlining productivity. It 
takes a litde while for these benefits eo reach 
fruition. That’s what you’re seeing now. Yd 
we’re not bumping our heads against any 
productivity limits. There’s always potential 
for further improvement, though the way in 
which you achieve it has to change. 

If yon compare companies in South Afri- 
ca with their counterp ar ts abroad, we have 
substantially move people involved in any 

operation at which you might care to look. 

Ift not necessarily lad; simply thatyoo have 
to go about tacld^ productivity the South 
African way. 

Thein^orscopeliesintheareaofqualify- 
peopte via improvements in their educa- 
tion by qjcctflc training and cocamining their 
shortcomings in ruder D make them more 
effective as compaiy empkyees. It's all part 
of AECTs ongoing programme. It takes a 
long time to pay off but you gpt a bit every 
yeat 

Spirit in BGSyour exports benefited from 
a dtt&K in the value of the rand. Now that 
thecaarency seems to have stabifiSHi, has 
fee e q x u t esmq^assa^' of your turnover 
ahered? 


for the export market. So exports have felkn 
in wlnme terms. 

Ws'rc pretty co mp e ti t r re on export mar- 
kets. We have a good product and we're a 
idiabte supplier; with die re sult that we cooid 
certainly sdl more overseas if we had the ca- 
pacity to do so. 

SpirarAECI has been hdxfledacasbrfkh 


MICHAEL SANDER 

erroror irritation. This has resulted in more 
prochxxivebehavkjiuthxT3Ughowthegnxip. 
. Government has been remarkably res- 
trained in usii« its emergency powers in the 
hbourunfcxi ^ere and I believe very strong- 


corporation. How have you earmarked -- ly Uiarthis is the wisest possible couise trf 


Bstfllwith us. What has bad a small impact 

on our exp on business is that as demand has 

lifted locally, onr cracky, which is moreOT 
less fixed, has left n$ with a smaller whnne 


yom- binds for the fatwe? 

Sanden Rfc certainly generate aloe of radx 
out of the investments we made some time 
ago. The numbers speak forihenisdus! The 
process will continue and weare. of course, 
looking at new areas of growth. 

Synfuels is a major oppononiiy fin- us. 
Ahhou^i vc're a krng way down the road, 
we’ve still some work to do brie, optimising 
the way in which the processes all fa together; 
W; do not expect to be in a position to seek 
formal approval for our project befofe 1989. 
but should it go ahead, it and the Mossed Bay 
ofl-from-gas undertaking would be die two 
biggest of their kind in the world. 

For a project of tiiis size, we foafll .need 
government assistance of one form or 
another, which we believe would be forth- 
coming. As loqg as our project is seen to be 
as viable or better than other forms of tech- 
nology and/or protesting optkxis — and bur 
approach has considerable advantages over 
many other forms of technology — then the 
green faght win materialise. 

Wr believe qufce strongly that methanol as 
an industrial stream is valuable. Going 
through methanol to downstream products 
is an attractive option for this country. 
Methanol is capable ofbdng produced with 
conve n tional technology horn all sons of 
different feedstocks, ranging from cril to gas 
to deceit qnafily coal; infifiertmqaditycoal 

and even coal discanis, giving the country . 
great potential for making use of its poor 
quality reserves and keeping its good reserves 
for applications which require high quality 
coal. 

Another advantage is the options that 
methanol opens up. %u can use methanol 
direedyasafuelandeaiiconveitittoooo- 
ventional fbdfi and pemKtasrical feedstocks 
qpteeffiaendy. So it’s a good fundamental 
bdldiiig Mock from which industry can de- 
velop — hence die reason for all the work 
we’ve put into it 

Spin: How would you chfflnctEjfee group 
labour retatfotBUd what has been the ef- 
frrmf Work rn ij nrd ^a t la n ? 

Sander: Onr labour relations are healtZQr- 
Tbis doesn’t mean that they’reconflict-ftee 
but tfag the professionalism on both sides 
comiiBies to develop, with natfiml respect 

btukiiiigBptliragii^tte^ 

process. The issues over which we conflict 
are beoomiqg professional issues rather dan, 
as sometimes in foe past, simply matters of 


action. Economics and negotiation in gocxl 
feith umsrfae the moderating force between 

-foe power of the unions and the pouter of the 
b usi ness community. 

Spine Within the AEO group, what <B- 
vhkns are pfonned to expand? 

Sumkr: The future of the agricultural indus- 
try is vital for the country and for our com- 
pany. Here there is potential fiat advancement 
in the form of better technology, better 
■ prodnetivity; better agricultural methods and 
better products to support. For this reason, 
-we’ve been putting an increasing volume of 
bur resources into all the facets of our agricul- 
tural business. 

Our fertiliser activities will serve as a base 

but we shaQ also be expanding in foe spheres 

of animal feeds, crop protection products and 
animal health products. 

Longer teim, there’s synfuels and foe pas- 
sfoOity of developing a deposit of trona in 
Botswana. It’s a key. strategic chemical and 
we're currently involved in viability studies 
against the background of the feet thaa it's by 
no means in short supply. 

Sidra: Has the government’s amended 
protection policy been effective? 

Sander: Yes. The approach has been totally 
professional and satisfactory. The govem- 

mem has pm a totof resource and effort into 
fmdii£ out wijat’s happening in the world of 
commodity markets and having done so has 
protected the industry here in a meaningful 
and appropriate fashion. 

Spira: Where does AECI stand on 

dlesanol? 

Sander: Diesand is technology of onr own, 
being aspioofTfiora our leadership position 
in explosives. Increasing interest is being 
jpneraied because of a mounting awareness 

of the need for clean air in many parts of the 

world. The industrialised countries have 


now they’re down to cleaning up automotive 
emissions. For a while this centred on tak- 
ing lead out of gasoline but this still left diesel 
engines to beldi all kinds of other nasties into 
foe air. An excellent route for creating clean 
burmpg automotive engines is diesanoi. 

Consequently, in the medinm-term future, 
v« see substantial potential for the product 
and the approach. It won’t take off tomor- 
row; butthe-tochnology ifrwcH developed and— 
we are malting . it available internationally. 

-Spiral SltiZM manpower shortages have 

plugi—l Hw» gnwffc Aft-faun wwmmy 

many years. Is fob a major problem for 
AEO, a company which is a leader in the 
sphere of sophisticated chemical 
technology? 

Sander: Yes, fob is a problem and we are 
only going to gel a share of the pool that's 
available in the country. At the same time, 
nobody — and I include >oung. talented men 
currently living overseas — would not be in- 
terested in associating themselves with some 
of foe exciting projects in which AEO is 
involved. 

Vft believe it wQl be practical to recruit 
skilled people in te rnati onally to fill the po- 
sitions which we can't fill locally. When you 
have an environment like this — and there 
are very few projects in the world that offer 
the experience associated with the aynfoel 
operatio ns currently being developed in 
South Africa — it isn’t difficult to attract foe 
high skill levels required. 

Bear in mind, AEO and many taher com- 
panies and institutions are already commit- 
ted to extensive education and training 
programmes to build up the mvt ex- 
perience of our local people. Also, there will 
be many more opportunities for highly- 
skilled black workers. Although the synfuel 
projects themselves will not create more than 
a few thousand jobs, there wfl] be highly posi- 
tive spinoffs (and thus employment oppor- 
tunities) for indu-stries serving these projects. 

Spira: Wbcddn’t South Africa's poor im- 
age abroad inBifatp a guf^Kt recruitment 
of personnel from overseas? 

Sander: I don’t think so. The more people 
that come here to have a look and see what 
it's really like the better. Ws get a lot of visi- 
tors from international companies and we've 
developed a “warts and all” exposure 
programme that we encourage them to go 
through. 

It’s amazing how many change their posi- 
tion after being given a balanced view of 
what’s really happening here. They sudden- 
ly understand that fob is a much more com- 
plex problem than they formerly perceived 
it to be. Tbey see thar there are many things 
being done — some helpful and some not 
hdpfiil. They see that we're not just string 
around hoping thar foe problems will go away 
They appreciate that there isn't only one so- 
lution; that there’s a whole range of solutions 
and that the final outcome will depend on 
how good South Africans are at coping with 
and adapting to the change* taking pine* 

So they go home no longer prescriptive. 

It doesn't stop them saying that South Afri- 
ca should chitoge hit they do go away with 
a better understanding of the complexities 
that are the fabric of South African society. 



AECI UNITED 

Cartton Centra Johannesburg 
RQ Box 1122 Johannesburg 2000 
Telephone (Oil) 2234111 
‘fetegrams Nitrogen Johannesburg 
Tetex 4*87048 SA Telefax 4-5005/7B SA 







4 


Financial Times Friday November 6 1087 


OVERSEAS NEWS 


Maggie Ford reports on the opening shots in the South Korean election campaign 

Presidential hopefuls take to the hustings 


WITH A LL four candidates in 
tiie South Korean presidential 
election finally out of the closet 
and on to the political platform, 
the eventual result is just as dif- 
ficult to predict as it was after 
last June's nationwide demon- 
strations. 

The demonstrations were trig- 
gered by the selection of Mr 
Roh Tae Woo as candidate for 
the ruling Democratic Justice 
Party for a presidential poll to 
have been held under old rules 
and which he was sure to win. 
After milli ons took to the 
streets in protest, Mr Roh an- 
nounced a series of democratic 
reforms, including the direct 
elections to be held in Decem- 
ber. 

Since then three other candi- 
dates have announced plans to 
stand and four political parties 
have been formed. The other 
candidates are Mr Kim Young 
Sam of the Reunification Demo- 
cratic Party, Mr Kim Dae Jung 
who heads the Peace and De- 
mocracy Party and Mr Kim Jong 
Pil of the New Democratic Re- 
publican Party. 

A fair degree of consensus ex- 
ists on the four candidates' ba- 
sic policies, reflecting national 
agreement over change in the 
country. Ail four support fairer 
income distribution, a drive to- 
wards reunification with the 
Communist north, an end to cor- 
ruption, freedom of the press, 
changes in labour relations 
with management and an end to 
military Involvement in politics. 

The overwhelming approval 



Kim Dae Jung: a good 
strategic thinker 

g iven last week by voters to the 
L partis an constitution indi- 
cates that there is widespread 
understanding about what 
should be done. The question is 
which man can be trusted to do 
it without provoking a backlash 
from hardliners and at a pace 
which will meet public aspira- 
tions for fairness and reconcili- 
ation and stability along with 
change? 

Mr Roh suffers the severe dis- 
advantage of having been in- 
volved in the 1979 military coup 
in support of President Chun 
Doo Hwan when they were both 
senior generals. Most Koreans 


are keen to vote for an opposi- 
tion president - that, they feel, 
is what the fight for democracy 
is about 

Mr Roh claims that bis June 
reforms prove he is a democrat 
and that as a former military 
man he is best qualified to deal 
with any attempts at Interfer- 
ence. He also scores points with 
those especially concerned 
about economic stability and 
defence. These voters tend to be 
older, but about 60 per cent of 
South Korea’s 25m electorate is 
under 4a 

Mr Kim Young Sam, a conser- 
vative democrat, has been fight- 
ing against authoritarian, gov- 
ernments in South Korea for 
more than 30 years. From a 
wealthy family and educated at 
a top university, he attracts con- 
siderable support from the 
large middle class and from his 
regional home of Pusan, the in- 
dustrial heartland of South Ko- 
rea, which has thrived on' the 
economic boom. 

Should he win, he is likely to 
adopt a policy of more gradual 
change than Mr Kim Dae Jung, 
his former colleague, Jung, who 
last week split from their joint 
party to form his own group af- 
ter a protracted but fruitless de- 
bate about producing one oppo- 
sition candidate. 

The split has attracted strong 
criticism because it could allow 
Mr Roh to win. Mr Kim Dae 
Jung has pledged that if that 
danger exists just before the 
election, one of them will step 
down in fovour of the other. 



dan. ! 
would 


Kim Young Sam: support from 
the large middle das* 

Mr Kim Dae Jung, who has 
suffered most from military dic- 
tatorships, almost won the last 
presidential election In 1971 
against Mr Park Chung Hee. He 
has been imprisoned, and near- 
ly executed, placed under 
house arrest and kidnapped un- 
der both governments. His base 
of support comes from the ur- 
ban poor, students and other 
young people and natives of his 
home province, Cholla. He also 
has some support from liberal 
intellectuals. 

Widely regarded as hi ghly in- 
telligent, a good strategic think- 
er and an experienced politi- 


he faces fears -that he 
take revenge for the 
deaths caused by the military in 
the Cholig city of Kwangju in 
2960. This In taro, might pro-, 
voice military retaliation. Those ; 
not from Cholla a&o worry that] 
they might suffer in changes to 
benefit the region. 

Mr Kim has yet to convince 
the public that he is sincere in 
his promise not to take revenge 
and to deal fairly with all peo- 
ple. 

Mr Kim Jong Pil, who is asso- 
ciated with the former P ark re- 
gime, Is not expected to have a 
chance of winning the election, 
but his support may eat into Mr 
Roll's vote, both among older 
people and those in his home 
area of Chung Chon. 

Gauging voting intentions may 
become easier in the next few 
weeks as media campaigning 
starts, although a ban on opin- 
ion polls remains in place. Mr 
Kim Dae Jung, the first candi- 
date to be interviewed In a se^ 
ries by senior journalists, int- 
pressed voters with his 
speaking ability, but foiled to 
convince them he was trustwor- 
thy. Mr Kim Jong Pil, who was 
interviewed on Monday, ap- 
peared insincere in his commit- 
ment to democracy. 

But South Koreans are dearly 
enjoying the greater freedom 
and the chance to vote in what 
is for many their first presiden- 
tial election. They remain de- 
termined to. secure democracy 
this time -and to hold on to it in 
the future. 


US steps in 
to assist 
Liberian 
economy 

By MeMas Woodworth in 

Abidjan 

MR JOHN BESTMAN, liber- 
fan Minister of Finance, has 
announced that a group of US 
economic ex pe rt s will arrive 
in Liberia next week and at- 
tempt to turn around the coun- 
try's foiling economy. He also 
revealed that the World Bank 
had suspended its operations 
in Liberia. 

The experts are part of a 27- 
man team of economic advisers 
known as Opex (operational ex- 
perts). They will install them- 
selves is various key minis- 
tries, Including the Ministry of 
Finance and the Central Bank 
of Liberia. Given complete 
control of aO financial 
operations, they will he re- 
sponsible for co-signfiig aU 
Liberian government cheques 
and executive document^ 

This initiative by the US, 
Liberia’s largest aid donor, has 
been prompted by the Govern- 
ment's inability to deal with 
bureaucratic inefficiency, cor- 


The World Bank has said 
that util Liberia Is able to 
control budget expenditures 
and make regular debt repay- 
ments. it will not resume 
operations. Tie International 
Monetary Fund is reportedly 
considering a similar with- 
drawal. 


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Iranian leaders 
again dismiss 
UN peace effort 


BY OUR HUDDLE EAST STAFF 

FOR the second time in three 
s one of Iran's top leaders 
.jliely dismissed as use l es s 
w.C diplomatic efforts to bring 
about a ceasefire in the seven* 
year-old conflict with Iraq. 

Mr Mjr-Bossein Moosavi,the 
Ira nia n Prime Minister, was 
quoted by Tehran yesterday as 
saying "we have no hope for a 
relation to the war through the 
• (UN) Security Council. 

His remarks folowed the for 
more caustic comments of Mr 
Hashemi Rafranjani.tbe power- 
ful Speaker of the Majlis (par- 
liament) and chief war spokes- 
man, who earlier this wee k 
accused the UN of cheating and 
said that the only way of bring- 
ing the fighting to an end was to 
deliver a "crushing blow" 


iplomats at the UN say that 
in private Iranian representa- 
tives show much more pragma- 
tism than the rhetoric emanat- 
ing from Tehran would suggest 
Even so at UN headquarters in 
New York there is pessimism 
following the receipt last week 
of replies from Iraq and Iran to 
revised proposals made by Mr 
Javier Peres de Cuellar, the UN 
Se cret ary General. 


Re is reported to have been 
"not encouraged” by meetings 
on Monday with Mr Said Rajale 
Khorassani.the Iranian Ambas- 
sador. and Mr lunat Kittani, his 
Iraqi counterpart 

On Tuesday Mr Charles Red- 
man. US State Department 
spokesman, said that it was time 
to start drafting a resolution on 
mandatory sanctions on the 
supply of arms to Iran. 

He added, though, that the US 
was willing to wait for the next 
round of talks, expected to take 
place some time after the forth- 
coming Arab summit meeting 
scheduled to begin in Amman, 
Jordan, on Sunday. 

Yesterday the Iraqi air force 
continued to sustain pressure 
on Iranian oil taffle ana instal- 
lations. A military spokesman 
in Baghdad said that the Abwax 
oil fields in south-western Iran 
bad been raided. 

Earlier Iraq bad rep orte d 
strikes on production facilities 
-in the Bazaan area in the same 
region, the Kbaig Island termi- 
nal, and four vessels in the 
northern Gulf 

One was independently iden- 
tified as the 289,778- toa Taftan. 
There was no news of any casu- 
alties. 


Arabs lead population 
growth rate in Israel 


ISRAEL'S population grew by 15 
per cent to C38m between 1885 and 
1988, but the growth rate among the 
country's Arab dtfeens was twice as 
high as tint of its Jewish ones, AP 
reports from Jerusalem. 

The numbers were included in 
the 1987 statistical yearbook 
hshed fay foe govenunenfrrtm 
tnl Bureau of Statistics. 

They ware in line with p revio us 
projections that there could be an 
Ardb majority in Israel red the oc- 
cupied Wait 8* 1 * Strip 

within a few decades. 

I poft t « B an og r mM e h—y 
has been used as a political argu- 
ment . Leftists say the a r my w m ^t 
withdraw from the occupied West 
Bank and Gaza Strip to preserve Is- 
rael's Jewish character. The right- 
wingers cell for the expulsion of the 
Palestinians from die occupied ter- 
ritories. 

At foe end of 1986, Israel proper 
wa&home to 3J0 Jews, or 88 per oent 
of the population; 60L000 Moslems, 
or 13JI per cent; 101,006 Christians, 
or 2J per cent; and 74*000 Druse, or 
L7 percent 

from 1985 to 1988, the number of 
Jews in Israel increased by 13 per 
cent, tiae number of Moslems by 3 
per cent, foe number of Christians 


fay LS per cent, and the number of 
Druse by 2£ per cent 

Mr Mosfae Scnm, the Govern- 
ment Statistician said among foe 
reasons for foe different growth 
rates were fewer Jewish immi- 
grants, a large number at Jews 
leaving foe country, and a higher 
birth rate among Moslems. 

He said each Moslem woman has 
an average of IS children, com- 
pared with 2£ children per Jewish 
woman. 

H current trends continue, Israel 
will have c population of between 
52 and 5JS people in the year 2000, 
fau-inriing about LI Arabs, Mr Sic- 
ton said. The J ew s w ou ld constitute 
78 per cant of the population. 

The yearbook does not provide 
figures for the occupied West Bank 
and Gaza Strip hut Mr Scrun said 
the Palestinian population was ex- 
pected to increase from about L4 in 
1988 to more than 2m by the year 
3000. 

Some 65,000 Jews at present Hve 
in foe occupied territ o r ie s. Mr Ste- 
reo did not say bow many were ex- 
pected to live foere at the end of the 
century. 

Israel c apt u red the West Bank 
and Gaza Strip during the 1887 Mid- 
dle East war. 


Israeli shekel 
underpressure 

PRESSURES are growing in Is- 
rael for a devaluation of the 
shekel, to compensate for this 
year's collapse in the value of 
the dollar against other major 
currencies, Andrew Whitley re- 
ports from Jerusalem. 

But any such move is likely to 
be stoutly resisted by the eco- 
nomic authorities. 'A devalua- 
tion m akes absolutely no sense. 
It is a bad habit we Israelis 
have got ourselves used to’ said 
Mr Amos Rubin, economic ad- 
viser to Prime Minister Yitzhak 
Shamir. 

Since last January's 20 per 
cent devaluation »g»hwu the 
dollar, and the simultaneous re- 
pegging of the Israeli currency 
against a broader-based basket 
of currencies, domestic prices 
have continued to rise at an an- 
nual rate of just under 20 per 
cent 

This has aggravated the deter- 
iorating exter n al competitive- 
ness of certain sectors of manu- 
facturing Industry. 


♦intci 


Japanese 
payments bonus 

JAPAN'S leading electrical 
groups are offering employees a 
5 per cent increase in their an- 
nual bonuses this year, Ian 

Rodger writes from Tokyo. 

The move, which is likely to 
be followed by most industries, 
is a reflection of the strong prof- 
it recovery in much of Japanese 
industry. However, electrical 
company executives warned 
yesterday that it should not be 
interpreted as an expression of 
confidence in their prospects, 
especially now that the yen is 
rising again against the dollar. 

Last year, when industry was 
befog battered by the sudden 
and sharp rise of the yen. bo- 
nuses in the electrical industry 
rose only 0.15 per cent on aver- 
age, while fo many other sectors 
they were cut or eliminated al- 
together. Since then, companies 
have raised prices and cut costs 
to restore profits. 

In the electrical industry bo- 
nuses amount to the equivalent 
of five months salary. 


Jayewardene visits India 
for talks on accord 

BY KJC SHARMAH NEW DELHI 


PRESIDENT Junius Jayewar- 
dene of Sri Lanka began a two- 
day visit to India yesterday, 
marking renewed efforts to re- 
solve differences over the im- 
plementation of the Sri Lanka- 
India accord. 

The differences continue in 
spite of prolonged meetings be- 
tween Mr Jayewardene and Mr 
Raj hr Gandhi, the Indian Prime 
Minister. The two leaders were 
both In Katmandu recently for 
the summit of the South Asian 
Association for Regional Co-op- 
eration. 

A major development yester- 
day was the association of the 
moderate Tamil United Libera- 
tion Front with the talks in New 
Delhi. This suggests that both 


the Sri Lankan and Indian gov- 
ernments axe brin g in g in the 
moderates as the main repre- 
sentatives of the Tamils now 
that the militant Tamil Tigers 
are fig hti ng Indian troops in Sri 
Lanka. 

Mervyn deSilvB adds from Cel- 
•■■bo: Sri Lanka's defence 
spending has been cut by 
RsL4bn (£27m) in the 1988 bud- 
get estimates presented yester- 
day by Mr Ronnie de Mel, the 
Finance Minister. However, de- 
fence expenditure, down to 
raA 2 on, remains the biggest 
item. 

_ Total expenditure is 
Rs83.8bn, an increase of 
RslLSbn. 


I ra\t’lliii^ on Business in luxt-mhour*'? 


Enyqr reading yon complimaifwy copy of the Faucial Toms *hca 
you re staying. . . 

. . , in Lncntmrx u ibe 

Hotel Cravat. Holiday Ion. Intercontinental Hold. Hotel 
President 


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IT’S NOT DIFFICULT TO TELL 

THE FORTUNES 

OF OUR TEA AROUND THE WORLD 
SIMPLY READ THE LEAVES. 


You don’t have to be a clairvoyant to discover how successful our brands of tea are in this country. Apart from 
the Tetley tea folk continually singing our praises on television, six million more ordinary folk, regularly sing our praises 
Jover their breakfast tables every morning of the week. 


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So perhaps it’s not so astonishing that our major tea brands, Tetleys, Lyons 
and Quick Brew now account for one in five of all the cuppas sold in Britain. A closer 

look at our tea business around the world does, however, 




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reveal some facts which are a little more surprising. one of the leading brands 

in the country and rapidly expanding. 


From Yemen’s backstreets to -Uruguay’s ritzy hotels. 




] oyk bfand^^arc Hthe* only English words many people speak. 

'VlTetdltoSOcnutrictaiiid wdiebn 
4 years wp’ve la (inched 20 new tea products. 

In over fifty different . countries in fact, you’ll find Allied-Lyons teas. In 
countries as far apart as Spain, Sweden, Canada and Portugal you’ll discover were the 
brand leaders. And in the billion, dollar United States tea market we’re one of the leading 
brands in the country and rapidly expanding. 

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Not of course that tea is to everyone's taster Which accounts for the success of 

■ * * * * i 

our coffee business around the world. In Great Britain, our Lyons Original is the best ! 
selling brand in the ground coffee market. 

And in the States our Medaglia D’Oro, Bustello and El Pico brands have 
long been making all the right noises with espresso and cappuccino drinkers. We have 



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Canada alone buys over 30 million dollars 
worth of our teas every yean 
From flavoured teas to tea bags. 


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One in every five 
cups of tea drunk in Britain 
is from Allied-Lyons. 


been the brand leaders in the American espresso coffee market for years. 

The success of our tea and coffee business is just one more example of our 
commitment to our role as a leading international food, drink and leisure group. Not 
that we have any intention of resting on our laurel leaves. 


Last year our sales of hot drinks 
were over £500 million. 

Who can say what will be revealed 
in the future? „ ■ 


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Last year our tea and coffee sales were over five hundred million pounds. And 
although we wouldn’t care to tell our rivals how we see the future, 
we would say this. We’re not predicting any good fortune for them. 


Allied-lyons 



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financial Times Friday November 6 1987 


WORLD TRADE NEWS 


Wardair secures 
novel financing 
for Airbus deal 

V * PEIB* MONTAGNON, WORLD TRADE EDfFOA 


WARDAIR, die Canadian air- 
line, will today sign a novel 
9504m financing facility to pay 
for the purchase of 12 A-31Q/300 
Airbus aircraft which it will use 
to develop its domestic Canadi- 
an routes. 

Co-ordinated by National 
Westminster and Banque Pari- 
bas, the deal breaks new ground 
for aircraft financing. It is likely 
to stimulate pressure for a more 
creative approach to aircraft 
financing as well as for changes 
in international rules on such 
credits. 

It is the first such deal to be 
Amded in the longterm capital 
market It also includes a sepa- 
rate 9130m facility which effec- 
tively extends its life to 15 years 
compared with the standard 12- 
year maturity normally permit- 
ted under Organisation for Eco- 
nomic Co-operation and Devel- 
opment roles for officially 
guaranteed aircraft finance. 

The two co-ordinators won 
the deal against competition 
from the traditional Airbus con- 
sortium of Midland, Credit 
Lyonnais and Dresdner Bank. 

Together with First Boston, 
which has been advising War- 
dair, they have devised a deal 
designed to meet the airline’s 
requirements of long maturity 
and local currency te n di n g. 

Mr Tom Currie, Wardair Chief 
Financial Officer, said yester- 
day the arrangement would give 
Wardair access to low cost Ca- 
nadian dollar fluids which 
would not have been available 
under a conventional export 


credit arrangement "For a deal 
this size, there was no way we 
wanted to have foreign curren- 
cy exposure." he said. 

Britain's Export Credits Guar- 
antee Department, Cofiace of 
France and Hermes of West 
Germany will guarantee the fa- 
cility, though not the separate 
refinancing arrangement to 
avoid conflict with the OECD 
rules. This is a separate dal 
which does not involve any offi- 
cial guarantees. 

The French and British guar- 
antees will be used to back-up 
letters of credit issued by par- 
ticipating banks. In tarn these 
will be used to back longterm 
borrowing in the Canadian do- 
mestic bond market. 

This is tiie first time official 
guarantees have been used for 
such a purpose. The structure is 
also designed, however, to pre- 
vent direct involvement by the 
agencies in Canadian capital 
market borrowing which they 
do not want at this stage. 

German regulations mean- 
while require ftmding for ex- 
port credits to be provided by 
local bank&The German por- 
tion, amounting to US92QL6m, 
will thus be made available di- 
rectly to Wardair by the state- 
owned K redita nstalt finer Wid- 
eraufbauCKFW). 

This portion will include a 
9112am fixed rate loan that is 
likely to be swa pped i nto Cana- 
dian currency. KFW will not 
participate in the separate refi- 
nancing facility to ensue com- 
pliance with OECD rules. 


Hercules to set up carbon 
fibre facility In Spain H 


BY DAVID WHITE IN MADno 

THE Hercules Group of the US 
Is to produce carbon fibre in 
Spain to supply European aero- 
space and defence manufactur- 
ers. 

A $UL8m plant at Parte, south 
of Madrid, due to start operat- 
ing next autumn, will be Hercu- 
les’ first in this field outside the 
US, where it is the leading pro- 
ducer of graphite fibre, ana the 
first facility of this kind in 
Spain. 

Mr David Hollingsworth, Her- 
cules’ ftutr n mi m>d chief exec- 
utive, said that about a third of 


output would be exported. 
The project was also g 


geared 


to US aircraft programmes sub- 
contracted in Europe, Including 
the McDonnell Douglas F/A-18 
fighter which is being supplied 
to the Spanish airforce and the 
same company’s MD-11 airliner. 

The new unit will provide tile 
materials for the carbon fibre 
stabilisers Which Spain’s State- 
controlled airframe company 
Construcciones Aeronautical 
(Casa) makes for the European 
Airbus and other aircraft 

Hercules has a 90 per cent 
share in the Spanish manufac- 
turing venture alongside faiM, 
an investment promotion arm of 
the INI state holding gronpi 


Clash over 
Kansai 
airport deal 
is settled 

By Ian Rodger in Tokyo 

THE festering row between Ja- 
pan and the US over access for 
foreign construction companies 
to the YUXXttm «7-3bn> K a n sai 
airport project near Osaka has 
been settled. 

However, Japan’s Transport 
Minister, Mr Ryntano Haahimo- 
to, admitted yesterday that bis 
Government still had a "big 
problem” in its relations with 
the US because of the obstacles 
foreign companies face in try- 
ing to win contracts in Japan. 

The construction industry in 
Japan, as in many countries, is 
closely linked with internal pol- 
itics, and Mr Ha s hi m oto made 
dear that it would be difficult 
for the Government to remove 
regulations and practices that 
protect the domestic industry 
from foreign competition. 

The Kansai airport row ended 
when the US accepted a Japa- 
nese proposal to put out to in- 
ternational tender more of the 
consulting contracts for the air- 
port. 

But at the same time the Japa- 
nese made clear that the re- 
vised practices adopted for the 
Kansai airport as a result of US 
pressure would not apply to oth- 
er public sector projects. 

The watiKal project is techni- 
cally a private sector undertak- 
ing because it is being carried 
out by a private company, Kan- 
sai International Airport Com- 
pany (KXAC), that was formed 
and financed by the national 
and regional governments. 

Mr Hashimoto said yesterday 
that it would be much more dif- 
ficult for the Government to 
change the rales affecting its 
own contracts. 

Be said his ministry, for ex- 
ample, could not alone cope 
with the US demand that the 
Xmmi rules apply to all the 
Government’s planned big con- 
struction projects, such as ma- 
jor airport expansions in Tokyo. 


Britain trades on Nigeria’s future 


THIS WEEKS British trade promo- Africa. The rnai 
ticm programme in the northern Ni- ehteery and tra 
gerian city o f Kano is designed to accounting for 4i 
hi g hli ght opportunities for expand- tai, followed by 
mg Angin-Nigerian trade following ting for 22 per o 
the resumption of credit cover by Britain suppU 
Britain’s Export Credit Guarantee OECD (Organis 
Department (ECGD). Co-operation am 

The three-day series of business ports to Nigeria 
s canner s — Britain and Nigeria: kat share that th 
Partners in Trade -which began cm of the larger ten 
Wednesday, ware officially opened On the investr 

by Mr Kenneth Clarke, the UK ponies are respc 
Minister of Trade »nH Industry. per cent of din 
It is the largest trade promotion mentln Nigeria, 
event in Nigeria for many years Nigeria has been 
and underscores the importance of ket for foreign si 
Britain’s trade and investment ties cult and even w 
with Africa's most populous conn- some companies 
try. The share of b 

The programme covers finance gross domestic j 
and services, agriculture and indus- since 1980, from 
try and experts will explain how the cent to less tha; 
UK can help Nigeria recover from year. This retied 
its protracted recess i on. in Nigerian oil e 

Nigeria is Britain’s largest mar- in 1980 to S&5bn 
kat hi black Africa with 1888 ex- As ml s m a rts 
ports of £568m($3Hm)- 23 per cent rowed heavily ti 
of total UK to sub-S aharan balance of pays 

Tokyo keeps up Caria 
Gatt protest T 
on sanctions J £tp 

»y Our TafcYO c orrwp oodn i-™™, 


Africa. The main e xp o rts are ma- 
chinery and transport equipment, 
accounting for 40 per emit of the to- 
tal, followed by phpmircife, accoun- 
ting for 22 percent 

Britain supplies one-fifth of all 
OECD (Organisation of Economic 
Cooperation and Development) ex- 
ports to Nigeria - the biggest mar- 
ket share that the UK enjoys in any 

of the larger World markets. 

fin thp hw wwtiHPwt vwfo, UK rmtu 

panies are responsible for about 40 
per cent of direct foreign invest- 
ment In Nigeria. Ho wev e r, recently 
Nigeria has been a contracting mar- 
ket for foreign suppliers and a diffi- 
cult and even unprofit able one for 
some companies. 

The share of i m p or t s in Njgui&'s 
gross domestic product has halved 
since 1980, from more than 20 per 
cent to less than 12 par tynt tins 
year. This reflects the steep decline 
in Nigerian oO exports from SSbn 
in 1980 to S&5bn last year. 

As ail exports fell, ISgeria bor- 
rowed heavily abroad to sustain its 
balance of payments, while allow 


Tony Hawkins, 
recently in Lagos, 
examines an 
exhibition in Kano 
which highlights 
Britam*s trade and 
investment ties with 
Nigeria which have 
strengthened 
recently. 

ing the buildup of an orizmsted 
58bn in arrears on trade and inter- 
est payments. 

British exports to Nigeria. fe& 85 
per cent in the first half of the 

1280s, though the UK's market 
share held steady at 18 per cast 
over the period. 

Foreign debt trebled in tbe first 
half of foe 1980s, reaching more 
than S22bn last year. The debt-ser- 
vice ratio soared to 47 per cant to 


1986 from aaity 2 per cent In J9W. 
Foreign suppliers found it 
in dy difficult to sefl to Nigeria «m 
even when they were su c tysrf al r 
payments were often delayed. ? 

As a consequence of the trade 

payments arrears the export credit 
agencies restricted or withdrew 
cover. This and the tightening of 
import resulted to lest 

year’s 40 per cent fell to British ex- 
ports to Nigeria and a further 17 pgr 
cent decline in the first half of 1887. 

However, foe situation is radical- 
ly riiwn rfng for the better following 
the introduction to mSd-1888 of the 
Onwhuai-adiustment invgiM# 
nnH tbe hnmch of the foreign cur- 
rency auctions 13 months ago. 

Thu subsequent steep fan to th® 
xudxa from a pre-auction tevd of 64 
US cents to 22 cents at present, has 
eflmjpqted the naira’s overvalua- 
tion. More importantly this has en- 
abled the authorities to Lagos to 

^j eh rnipn^t lipQTKring- 

- in recent several coun- 

tries have re s um ed o ffic ia l credit 
cover to Nigeria on a limited b a sis . 


though a ftflng um pfckm will not be 
possible until Nig er ia hat met ar- 
rears cm payments due to some ex- 
port credit ageodex. 

In July, Britain announced tbe re- 
sumption of medium-term credit 
cover by foe ECGD and tbe ptervi- 
sion of a £206m credit line for agri- 
cultural and industrial imports. In 
addition, cover will be provided for 
certain existing ECGD-bachetf pro- 
jects, as well as for new projects oa 
a co-financing basis with the Worid 
Bank, increased cover wtil also be 
provided for short-taxm trade trans- 
actions of up to 188 days. 

The currency auctions, trade sad 
payments liberalisation and tbe 
lowering of tariffs under the struc- 
tural adjustment programme all 
point to impr oved trade opportuni- 
ties. though the nature of these bos 
changed. 

Under the new tariff and ex- 
change regime, import-intensive, 
low-value-added activities are no 
longer viable and the emphasis is 
switching to the supply of raw ma- 
terials. 


Caria Rapoport finds a continuing reluctance to buy foreign chips 

Japan hangs on to its cutting edge 


JAPAN INTENDS to continue 
with Its protest under tbe Gen- 
eral A g ree m ent mi Tariffs and 
Trade against the remaining 
9185m worth of US sanctions 


Malay sian Airline 
orders GE engines 

Malaysian Airline Systems has 
selected the General Electric 
high bypass turbo fan engine to 
power its Boeing 747-400 air- 
craft in a deal worth 960m, AP- 

BJ reports from Even dale. Ohio. 

The company said it would take 
delivery of its first 747-400, fit- 
ted with the CF6-80C2 en- 
gtoesjn March I960. 


Mr Hajime Tamm, Minister 
of International Trade and In- 
dustry, raid yesterfov he wel- 
comed the partial lifting of 
trade sanctions this w eek . No- 
netheless, he said, the remain- 
ing sanctions ever laek of mar- 
kat access wen kept without 

Japan will ask Gatt to set up 
a multilateral panel te discuss 
the Isaac when it holds a coun- 
cil meeting in Gam next 
week. A formal complaint will 
probably be filed at a Gatt gen- 
eral meeting in early Decem- 
ber 



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and surroundings 

Please, come in. 

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Head office 

Milan - 2 Piazza Cbrdusio, Milan 20123 (Italy) If 

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Representatives abroad 

Amsterdam - Boons Aim - Cairo - Caracas - Chicago - Frankfun A/M 
Hong Kong- Houston- Moscow- Paris- ftkiqg- SaoFfcuto- Zurich 


*be* eweI 






SEMICONDUCTORS in Japan 
are so important to the coun- 
try's industrial health that they 
axe called the rice of industry. 
Like the real thing, however, 
the Japanese still prefer the 
home-grown variety. 

President Ronald Reagan’s 
partial lifting of trade sanctions 
this week does reflect progress 
in the long-running US-Japa- 
nese semiconductor trade dis- 
pute. In lifting 984m (£48m) 
worth of sanctions, tbe Presi- 
dent effectively said that the 
Japanese had stopped dumping 


Ike sanctions were impeaed 
last April over Japan’s alleged 
fhflnre te open its markets te 
foreign chip makers, pins al- 
leged damping of Japanese 
chips in third-country mar- 
kets. The sanctions took the 
form sf 1M per cent duties on 
oeiected Japanese products. 

Punitive duties now remain 
in place ea high-performance 
desk-top com paters, lap-top 
cam paten and alectra-me- 


But the US says the problem 
of laek of access to the Japanese 
chip market remains and in 
spite of official pronou cements 
by the Japanese Government to 
the contrary. Japanese industry 
executives privately agree: Ja- 
pan’s chip industry is too impor- 
tant to give away to foreign sup- 
pliers, they say. 

Semiconductors provide the 
Japanese with their cutting 
edge in product Innovation and 
manufacturing efficiency. The 
newest, smallest, video cassette 
recorder (VCR) will sell at any 
price, regardless of the yen-dol- 
lar exchange rate and the key to 
am king such products at an at- 
tractive price is the microchip. 

Japan’s traditional com- 
plaints against US suppliers - 
which pioneered the microchip 
- - were over alleged problems in 
1 quality, delivery and design. 
According to the Japanese 
these still , exist, but most of 
ihwn say US and European sup- 
pliers axe much improved in 
these areas. The remaining 
problem, however, appears in- 
! soluble, even as the dollar 
i drops to unprecedented lows 
against the yen, making US 
chips steadily cheaper in Ja- 
pan. 

The problem is one of flexi- 
bility and speed and it cuts to 
the core of the way Japanese 
companies do busi ness . 1 Vs not 
a question of quality," Carole 



US and European snppHefs are atfH 
acceptance levels sf Japan 


fee quality 


acceptance levels sfji 

Byavec, an anatyst with Salo- 
mon Brothers in Tokyo, ex- 
plained. It’s the abilility to 
m ake chips which can keep up 
.with tire Japanese." The chip 
makers and users work together 
constantly redesigning ebips to 
eusnre that the end product can 
be better, smaller or at least dif- 
ferent freon a competitor's. 

This ability is particularly im- 
portant now, as the big electron- 
ics companies scramble for 
ways to maintain sales abroad 
in fece of the high yen and to 
boost sales at home to make dp 
for lost exports. 

The Japanese Government is 
periling industry hard to in- 
crease its purchases of foreign 
microchips, with heavily publi- 
cised meeting between indus- 
try leaders and government offi- 
cials. Official figures do show 
some improvement According 


to foe Japanese, foreign chips 
a ccounte d for 12.7 per cent of 
tbe Japanese market in foe 
three months to August, com- 
pared with an average of 1&3 
per cent in foe six months from 
April to September last yean. 
The US disputes these figures, 
however. It says the increase Is 
much smaller. 

The US is seeking a 2D per 
emit share of the Japanese mar- 
ket hy 1991 for foreign chip sup- 
pliers, with a target of 15 per 
cent in fee short-term. In spite 
of the recent upward trend, in- 
dustry and government officials 
doubt whether these goals can 
be met Some even fear that the 
figures may start sliding again 
when inventories of foreign 
chips bought out of patriotic du- 
ty are depleted. 

Furthermore, Japanese chip 
makers continue to criticise US 


suppliers for foiling to meet 
Japanese quality standards. At 
an International Semiconduc- 
tor Co-operation Symposium 
last month, a senior executive 
from Canon, the electronics 
goods manufacturer, detailed 
the quality problems ft had 
found with its imported chips. 
Mr Keizo Yamaji, executive 
vice-president, said that imput- 
ed chips would account for 25 
per cent of Canon's chip pur* 
chases this year. Nonetheless, ft 
had encountered "serious trou- 
bles with overseas semiconduc- 
tor devices' 

Canon had dealt with all the 
leading chip manufacturers out- 
side Japan and had encoun- 
tered quality problems foe a 
long time, he said. After inspec- 
tions, Canon dis c overed that 
these problems had occurred 
primarily in wafer production. 
He said that foreign suppliers 
needed to Improve their level of 
cleanliness and automation. 

Another large chip purchaser 
supported Canon’s view. The 
Japanese work on a zero-defect 
basis, he said. Americans have 
an acceptance quality level, or 
AQL* which means that three 
out of a thousand chips could be 
defective to a given batch. 

"We always guarantee 100 per 
cent quality to our customers,* 
said one of Japan’S leading 
electronics cwp”"'** "So our 
only quality level acceptance is 
100 per cent." 

' Outer chip makers contacted 
fola Week, had similar com- 
plaints.' One pointed out that 
with the recovery in chip de- 
mand in the US, Japanese 
needs were sliding down their 
list of priorities. "You cant say. 
sorry, not now, we’re too baq. If 
you say that, we say, you’re too 
late, permanently," said an ex- 
ecutive with one of tiie big chip 
buyer. 

Given Japanese tenacity and 

the determination of the 
Americans, this trade dispute 
could just run and run. 


UK to boost Israelis win 


trade with 
Taiwan 

ByBobKtogkiTatoal 

BRITAIN is to send its first ma- 
jor trade mission to Taiwan this 
month in a drive to consolidate 
trade and fovestmehtties. 

Taiwan’s recent liberalisa- 
tion of Us trade policies, its de- 
cision to drastically cot import 
tazlfb, and its move to forth er 
diversity its export markets 
have all helped to increase Brit- 
ish interest in Taiwan as an ex- 
port market and as a source of 
Investment in British indus- 
tries, said Mr David Pointon, di- 
rector of the Anglo-Taiwan 
Trade Committee (ATTCX 

The UK this ye&r has emerged 
as Taiwan’s second largest Eu- 
ropean trading partner after 
West Germany. Exports to the 
UK amounted to gLlbu in Sep- 
tember, while imports totalled 
$538m,leaving a 9568m surplus 
in Taiwan’s favour. 

The Taiwan import figures 
show a 108 per cent increase on 
lari year, while exports were up 
fay 052 per cent. Taiwan’s trade 
with Europe was up 68 per cent 
to more than |9.4bn. Exports 
were up 73 per cent to $5.7bn, 
while imports, rose 62 per cent 
to93.7bn. 

Mr Peter Godwin, ATTC presi- 
dent and a director of Standard 
Chartered Merchant Bank, will 
head the 16-member mission. 
Mr CLP. Chang, deputy secretary 
of the Euro-Asia center, pre- 
dicted that European compa- 
nies will win several contracts 
in tenders for the Taipei medi- 
um-range transit system - limit- 
ed to US and European compa- 
nies - because the Europeans 
had greater expertise than the 

Americans. 

Beater adds: Taiwan's cabinet 
has a p pro v ed plans for the 
conifers largest import tariff 
cuts, averaging 58 per cent on 
3^75 products. 

The Finance Ministry propos- 
al will be sent-to pa r lia m e nt foe 
approv&LThe cuts, to take effect 
next year, are on 80 per cent of 
imports, but the largest reduc- 
tions are on its main exports. 
The cats will leave Taiwan's top 
tariff rate at 53 per cent 


$20m US 
army order 

flyAFK»»wWh»sytoJawi»alsm 

THE US Army has awar de d 
contrac ts w ra t h around 928 b 
for tank-mounted mine 
ploughs tea little known Itrac- 
li defence equipment company. 

Kamta Structures and 
Systems, u wholly-owned sub- 
sidiary of state-owned Israel 
Aircraft Iniosfries, confirmed 
yesterday that it had wan two 
separate contracts for its mine 
plough - aa ele etro m echanical 
device which it claims to be 
one of the most cost-effective 
in the world. 

Tbe contract is one of tiie 
largest- awarded in many 
months to the troubled Israeli 
defence Industry, which is suf- 
fering from aver capacity and 
a sharp decline in domestic ar- 


• Israel Aircraft Industries in 

particular has been hit hard by 
recent government decisions 
not to sign new military con- 
tracts with South Africa and te 
cance l fee Lavi combat air- 
craft. 

The mine plough de veloped 
by fee Bccrahcv a b a s e d plant 
carries a unit nice tag at 
about 970AM, and has report- 
edly been sold te a number at 
governments, in addition to 
the Israel Defence Forces. 

Bat tiie US Army aider, un- 
der negotiation for the past 
year - for an estimated M0 
emits - re pr e sen ts a critical 
breakthrough into a b>»m mar- 
ket which holds the key to fee 
company's fetare. 

Among other items, Kamta 
also HMmafoetarei wheeled ar- 
moured cars, large patrol craft, 
and anti-aircraft guns. Like 
many other branches of the Ia- 
raeti military industries com- 
plex, until recently Kamta was 
orientated almost exclusively 
towards meeting tbe needs of 
fee country’s own armed 


Only in the past few years 
has ft been compelled to seek 
.foreign c usto m ers an Its own 
behatt. 


NOTICE TO HOLDERS OF 

GALAXY OIL INTERNATIONAL N.V. 

8 1/2% CONVERTIBLE SUBORDINATED 
DEBENTURES DUE 1996 
CUS1P NO. 3629Q2AA6 

Pursuant to SectionSldof that certain Indenture (the "Indenture"), 
dated as ofJaauatyl, 1981, between Grimy PA International N-V- 
( the ‘‘Company”), GmbuyOa Company, GtuKantor^thc “Gaxran- 
Dor") tad Bank of the Southwest National As so ciati o n , Honao a, 
Trustees (pscdece s mr of the ondciiigpcd), yon arc hereby notified 
that the Gu waa torhis fifed a rofan te iy p eti tion trader Chapter 11 
b tha United States Ban kru p t cy Coort for the Northern District of 
Texas WkMta nth DjvBdoa on April 6, 1997. Safe rang of a 
v o t o aftiy petition m bantaaptqr by the Guanrator co nsti t utes «a 
event of defimlt as defined in Section 501(5). 

Tbe Trustee moommeods that any bolder of tbe Debentures (the 
‘‘Debentures'') desiring inforxnaiKn about tbe Guaiantor^ or the 
Co mpany** actions steering tbe Dcbc at wicscoaiaet the Goanmou 
A ttenti on : Treasurer, 918 Lamar Street, Wichita ftdls, Texas 76307 
or the Ooatpany, Haadehkade 8,^ Wmeawtad, Cmacao, Nothcdaads 
AadBea. 

Gommariatioa to the oodexrigted nuybe addressed to it ac 

MBtafc Houston, National A ra o tit tioo 
GmpatateTraat Deportment 

Three Altec Center 
Sth Floor 

Houston, Texes 77002 
Attention: David Ifenefl 

BdBANK HOUSTON, NATIONAL ASSOCIATION 
As Trustee 


OSTERREICHISCHE 

VOLKSBANKEN-AKTIENGESELLSCHAFT 

US $25,000,000 

Floating Rate Subordinated Notes doe 1989 

Notice is hereby given pursuant to the 
terms and conditions of the Notes 
that for the sik months from 
9 November 1987 to 9 May 1988 
tbe Notes will bear an interest rale of 
7% per annum 

with a coupon amount of US$192.74 

London & Continental Bankers Limited 
Agent Bank 





7 





s','*'*" 








Financial Times Friday November 6 1987 


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8 


Financial Tunes Friday November 6 1987 


White House, Congress 
close to SDI compromise 


BY STEWART FLEMING IN WASHINGTON 


WHITE HOUSE officials are on 
the brink of an agreement with 
congressional negotiators un- 
der which the US Administra- 
tion would limit testing of the 
Strategic Defence Initiative 
(SDD in the 1988 fiscal year so 
as not to breach the narrow in- 
terpretation of the 1972 Anti- 
Ballistic Missile treaty. 

They have also agreed that 
the Administration will not de- 
ploy more nuclear weapons and 
violate the SALT H treaty, even 
though the Administration has 
said it is no longer bound by the 
SALT II limits. 

Last week it was reported that 
representatives of the Congres- 
sional Armed Services Commit- 
tees and the White House bad 
opened negotiations over 
clauses attached to the 1988 De- 
fence Authorisation Bill which 
are designed to force the Ad- 
ministration to stay within the 
narrow interpretation of the 
terms of the ABM treaty and the 
SALT 11 limits. 

Congressional analysts say 
negotiators are close to a com- 
promise although details have 
yet to be worked out and ap- 
proved by the White House. 
Ibis would remove from the Do- 


PRESIDENT Ronald Reagan 
announced yesterday that Mr 
Caspar Weinberger was re- 
signing after nearly seven 


Mr ff f aga u no minate d Na- 
tional Security Adviser Mr 
Frank Carlncd to succeed Mr 
Weinberger. He appilntei Mr 
Csriuccfs deputy, Lt Gen Co- 
lin Pawell, to sake over Mr Car* 
loco’s White House post 
Mr Reagan said: ’We're here 
to say Godspeed to an old 
Mend, the finest secretary of 
defence in the history of our 
nation - Cap Weinberger.’ 

Mr CarlnccTs nomination re- 
quires Senate confirmation. Lt 
Gen Powell’s does not. 

fence Bill the language requir- 
ing the A dminis tration to seek 
congressional approval for test- 
ing of SDI which would breach 
the ABU treaty. However, the 
White House would agree that 
1988 fending levels did not per- 
mit it to cany out such tests. 

If President Ronald Reagan 
accepts this formulation it 
would represent a significant 
step back from his earlier 
stance. However, it would also 


avoid the threat of a public con- 
frontation with Congress on 
arms control policy on the eve 
of the summit negotiations with 
Mr Mikhail Gorbachev, the Sovi- 
et leader, on December 7. 

Moscow has made it clear that 
the pace of testing of the SDI 
will be one of the key issues it 
wants to discuss at the summit 

Conservative supporters of 
the SDI programme have been 
charging that efforts led by Sen- 
ators Sam Nunn and Carl Levin 
to force the President to stay 
within the narrow interpreta- 
tion of the ABU treaty, which 
strictly limits SDI testing, not 
only tie Mr Reagan’s hands at 
the negotiating table bnt also 
give Moscow something it wants 
without having to make any con- 
cessions. 

The agreement being worked 
out now meets that criticism by 
leaving the President with the 
apparent freedom to adopt the 
broad interpretation of the 
ABM treaty in the future. 

Conservative advocates of the 
SDI programme will almost cer- 
tainly denounce such a compro- 
mise seeing it as a ferther step 
towards putting limits on SDI 
testing. 


Mexico suspends debt swap 
programme for two weeks 


BY DAVID GARDNER HI MEXICO CITY 


MEXICO has suspended its 
debt-to-equity conversion pro- 
gramme tor two weeks, accord- 
ing to senior finance officials. 

The formal reason for the sus- 
pension is so that the financial 
authorities can review the ef- 
fects of the scheme on liquidity 
and inflation, interest rates and 
credit, and on the budget, due to 
be announced in two weeks’ 
time. 

But officials confirm lt is also 
intended to send a discreet 
message to Mexico’s creditors 
that they cannot expect to con- 
tinue indefinitely to be the 
prime beneficiaries of debt ar- 
rangements the Mexican au- 
thorities regard as anomalous 
unsustainable. 

Mexico suspended the 
scheme briefly In March to 
pressure laggard banks into 
committing their portion of the 
$7.7bn syndication signed on 
March 20. 

In the Mexican view, enunci- 
ated publicly by Dr Pedro Aspe, 


Planning Minister, two weeks 
ago. the banks are being paid 
fell interest on Mexico's $103bn 
foreign debt, which is valued in 
the secondary market at about 
50 cents on the dollar. 

This is compounded, Mexican 
officials argue, when it is the 
banks which derive more bene- 
fit than the country itself from 
the discounts to be had in the 
secondary market through the 
debt swap mechanism. 

This, in essence, allows an In- 
vestor to purchase foreign debt 
at just over half its face value 
and then exchange it with the 
Mexican Government tor as 
much as 90 cents on the doillar, 
but redeemed in pesos linked to 
agreed investment programmes, 
above all in export sectors. 

The authorities authorised 
$lbn in debt swaps last year, 
and set a ceiling of $L5bn this 
year. This was primarily to 
avoid any inflationary surge 
from 'swap pesos' swelling the 
money supply, but also reflects 


wider reservations about the 
scheme^ 

The major reservation now 
concerns the real value of the 
debt and the portion of the dis- 
count on it which reverts to the 
debtor. Dr Aspe told Mexico's 
College of Economists two 
weeks ago that 'the moment has 
arrived to design mechanisms 
which reduce the nominal value 
of the (foreign) debt to its mar- 
ket value, so that it is the debt- 
ors who capture the total 
amount of the discount' 

The suspension of the debt 
swap programme Is just being 
consistent with the new debt 
policy,” a senior finance official 
remarked this week. 

■ Freezing the scheme offers 
Mexico one of the few ways it 
has of pressuring its creditors 
short of outright confrontation, 
precisely because, unlike Brazil 
and Peru, it has not taken uni- 
lateral steps to limit its debt 
service and continues to pay in 
full 


AMERI CAN NEWS 

Brazilian 
employers 
to oppose 
jobs move 

By Ivo Dawnay in Mode Janeiro 


BRAZILIAN businessmen ere 
la unching a na ti ona l day of 
protest against radical labour 
laws, approved by the key 
drafting committee for the new 
constitution. 

A numb er of newly-created 

business organisations, 

formed specifically to lobby 

the Constitutional Assembly, 

are demanding that the provi- 
sions be scrapped when they 
are debated by the plenary ses- 
sion of Congress, probably 

next month. 

Hie proposal that has most 
alarmed employer* t* a guar- 
antee of a job-Wlife tar work- 
er* who have c o mplete d more 
than three months frill-time 
employment at a company. 
They have wanted that this 
alone could result in hundreds 
of bankruptcies* particularly 
com p ani es . 


Other clauses opposed by 
business are the redaction of 
the working week by four 
hours to 44 and automatic dou- 
ble-time payments far those 
working overtime. 

About 3,00ft business organi- 
sations are expected to back 
the protest, (he form of which 
is yet to be decided. They in- 
clude the Union of Brasilian 
Businessmen CUBE) whose re- 
cently-formed consultative 
council unites 72 of the coun- 
try’s most influential industri- 
al and financial leaders. 

Beyond the labour previ- 
sions, the business community 
fears that new tax rises are Im- 
minent. According to Mr Lawr- 
ence Pih, co-ordinator of s 
i wnHijg businesses asso- 
ciation, results of a detailed 
questionaire have shown 
mounting discontent at the 
Government’s interfere n ce la 
markets and Its failure to cut' 
the public lector deficit 

Bahamas call to 
invalidate poll 

By Athene Damianos In Nassau 

THE BAHAMAS* two major 
political parties have ashed the 
election court to declare void 
.the June 19 election results in 
48 af the 49 constituencies. 

Beth parties have asked the 
election court to declare their 
candidates the winner or, al- 
ternatively, for a declaration 
that the elections were void be- 
cause the voters’ register was 
not published in the time 
frame or manner stipulated by 
flwlw. 


Tim Coone reports as pressure for economic change grows in Argentina 

Alfonsin faces unenviable choice 


AN unseasonsl 
the Argentine Government of 
President Raul Alfonsin sup- 
port from an unexpected quar- 
ter during Wednesday’s general 
strike. 

Hie rain, which Luted mast of 
the day, dampened spirits and 
turned what was expecte d to be 
a major trade union protest 
march upon the presidential 
palace into a sodden, subdued 
affair. Only 30,000 demonstra- 
tors turned out to listen to the 
exhortations of the strike organ- 
iser, Mr Saul Ubaldini, from un- 
der a passive panorama of drip- 
ping umbrellas. 

But the 12rhonr strike suc- 
eoun- 
an- 

m&mge 
unpopularity of the Govern^ 
meat's controversial economic 
policy. Even staff at the presi- 
dential palace and airline pi- 
lots who had ignored the previ- 
ous eight general strike calls 
made by the General Confeder- 
ation of Workers (OSH since 
1983, joined this stoppage. 

Mr Ubaldini, the 
secretary-general of the CGT, in 
his most frontal attack on the 
Government, called for the res- 
ignation of Mr Joan Sourouille, 
the Economy Minister, and an- 
nounced that the latest strike 
was simply the start of a pro- 
longed campaign of industrial 
action against the economic 
policy. The conditions for a 
trace, he said, were an immedi- 
ate moratorium on Argentina's 
$54bn foreign debt and a reacti- 
vation of domestic demand 
through rises in real wages. 

Such a position, although con- 
sidered an extreme representa- 
tion of the Peronist opposition 
proposals on economic policy, 
is nonetheless finding an echo 
even within the ruling Radical 



feathers and to try to keep alive 
a go v er nm ent proposal to put 


The Government’s path out of 
Argentina's prweat economic 
Crisis Is through a plan ofex- 

8 art-led growth over the next 

community and stable interest 
rates. A worldwide recession, 
with its implications for a down- 
turn. in trade and felling com* *«* “*■*• — t-* - •« 

modity and raw material prices; governorships of Ifae country's 
is the worst possible scenario 22 provinces, 
for the success of the plan. 

Argentina's felling trade sur- 
plus will be reduced ftirther 


DUUI a « wwkoimmsw rtiij 

by the Government: from De. 
cember onwards the opposition 
parties will hold a majority in 
the two houses of the Congress 
and will hold all hut two of the 



Sooroaffie: 
unprecedented j 

party (UCRL Mr Federico Sto- 
rani, chairman of the lower 
house foreign affelra committee 
in the Congress and a promi- 
nent figure in the Radical party 
with the backing of most of the 
party’s youth movement, said 
that since the party's Septem- 
ber electoral defeat, There is no 
longer a blank cheque for the 
economic team. There is a pro- 
found discussion going on — and 
the one area where we do have 
the possibility of chanring em- 
phasis is on the foreign debt” 
The world stock market crisis 
is also expected Anther to un- 
dermine Mr Somxndlle’s credi- 
bility Hie increasing probabili- 
ty of a worldwide recession 
following the Wall Street crash 
last month and a steady rise in 
interest rates by next year 
weaken the nfngg of 

his economic strategy and make 
an Argentine debt default ever 
more like Jy. 


meet its debt obligation*. The 
willingness of the creditor 
banks, themselves under pres* 
sure after the stock market 
crashes, to extend further loans 
to Argentina is equally ques- 
tionable. 

Mr Sourouille and Mr Mario 
Broderaohn, the Finance Minis- 
ter, are feeing unprecedented 
pressure. Mr Brodersohn last 
week raised the hackles Of pro- 
vincial governors when he told 
them that they would not get ex- 
tra financial support unless the 
opposition backs a package of 
tax reforms now awaiting pas- 
sage through Congress. 

At the same time, the central 
bank began bouncing cheques 
from banks owned by the pro- 
vincial governments which are 
an important source of fi na n ce 
for the provinces. The gover- 
nors have been further* out- 
raged at figures produced by Mr 
Brodersohn which purport to 
show that the provinces have 
been profligate spenders. The 
governors claim the figures 
have been deliberately falsified 
by the Finance Ministry. 

Meanwhile Mr Enrique Nosig- 
lla, the Interior Minuter, has 
been called in to smooth ruffled 


Senior economic advisers in 
the Government warn that bij- 
cre to approve foe reforms win 
seriously prejudice government 
finances in 19881 

With the likelihood of the Per- 
onists entering into such a pact 
now increasingly remote .with, 
out a big shift in economic poli- 
cy, press speculation in the past 
few days has centred on the pos- 
sibility of the right-wing party, 
the Centre Democratic Union 
(UCD) and Its leader Mr Alvaro 
Alsogaray, being asked to be- 
came the lynchpin of the pact 

Together with several of the 
fm»ii regional parties, a UCR- 
UCD alliance would hold a suf- 
ficient majority in the Congress 
to pass the tax reform laws the 
Government wants. Mr Alsogar- 
ay has made it clear, however, 
that such a pact would require 
giving him much greater influ- 
ence over economic policy* He 
is a former economy minister m 
the 1960s and a self-confessed 
free market guru and admirer 
of the US system. 

For President Alfonsin it is 
an unenviable choice. To ac- 
commodate the trade unions 
means a rupture with the banks. 
To muddle through with his 
present economic team or to 
strike a deal with Ur Alsogaray. 
however, implies all-out war 
with the anions. 


Reagan to seek Contra aid 
as peace deadline passes 


BY OUR FOREIGN STAFF 

THE REAGAN Administration 
is to ask Congress for 830m in 
non-lethal aid for the Nicara- 
guan rebels, according to US 
congressional leaders as the 
first deadline passed yesterday 
in the peace pact signed on Au- 
gust 7 by five central American 
leaders. 

President Ronald Reagan is 
likely to stress the failure of 
President Daniel Ortega of Ni- 
caragua to comply with the 
agreement under which yester- 
day was the deadline for demo- 
cratic reforms and ceasefires in 
the civil wars in Nicaragua, El 


Salvador and Guatemala. 

Though Nicaragua’s ruling 
Sandixusta National Liberation 
Front has taken some steps to 
comply, fighting continued in 
Nicaragua this week and the 
government has yet to lift Its 
five-year-old state of emergency 
or grant amnesty to political 
prisoners. 

President Ortega said yester- 
day his government would take 
positive steps to comply with 
the agreement 

The aid is to run to December 
16, when moves towards central 
American peace are evaluated. 


Haiti election controls 
spark violence and arson 

BY MICHAEL TARR « PORT-AU-PRINCE 


THE disqualification of 12 pres- 
idential candidates with strong 
ties to the Duvalier family for- 
mer dictatorship has triggered 
a wave of arson and machine- 
gnu attacks against the organis- 
er* of general elections in Haiti. 

On November 29 an election 
is scheduled to replace General 
Henri Namphy’s caretaker jun- 
ta and local elections are 
planned for December 20. 

One of the electoral council's 
nine members, Mr Emmanuel 
Ambrolse, has accused General 
Namphy** Junta of direct re- 
sponsibility for the attacks. He 


says the junta is in league with 
the Dnvalierist old guard. 

At midnight on Monday, hours 
after the electoral council an- 
nounced its ban on the 12 Duva- 
lj crisis, armed men set fire to 
the council's headquarter* in 
central Port-au-Prince and to a 
nearby store. 

They machine-gunned and 
bombed several other buildings 
associated with people closely 
identified with an article in the 
new constitution that bars lead- 
ing Duvalierists from holding 
public office during the next de- 
cade. 




DEVELOPMENT 

CORPORATION 



Initiative 

Withfo weeks afteaxming operational Ibesside Devel- 
opment Corporation acted as the catalyst to speed the 
progress of a host of established and new initiatives, aU 
of which offers outstanding development and invest- 
meat opportunities. Among them - 

Tbesdale riverside ho m^ wimiiien dai and retail 

Usesside Oflfehore Base fiar ocean bed technology 
Hartlepool Marina and maritime heritage complex 

Tho—Mn Internation al nature reserve 
Teesside regional leisure centre 
Belasls Hall Technology Park 

BomsOeld Pink prestige indiistiial development 

Tfees walkway and war to enhance waterside 
environment 

Research and Development opportunities with IQ and 
the chemical industry 

Middlehaven oonmwirrlaf/rnsMmitfal development 
Improvements to communications and other facilities 


'We are setting out once again 
to be ahead of our time../ 




>n controls 
tte and an 



vr,T : 
■* . 

..tv • 






US**' 



I 


Financial Times Fridav November 6 J987 


UK NEWS 



record quarterly 
insurance sales 


BY EMC SHORT 

THE UK is enjoying a boom in: 
individual pensions sales. That 
was borne oat yesterday when 
the Association of British Insur- 
ers published record sales fig- 
ures for the third quarter. 

In what is normally a quiet 
period for pension sales, new 
annual pr emiums rose by a 
third on the corresponding pe- 
riod last year from £74m to £98m 
and single premium mIm by a 
quarter from £104m to £129m- 

As a result, pension sales In 
the first nine months were 25 
per cent up at £304m for new an- 
nual premiums' and 32 per cent 
higher at £584m for single pre- 
miums. 

However, the pension growth 
came mainly frnm lintwi con- 
tracts, which showed a 55 per 
cent rise to £51m in new annual 
premiums in the quarter, and a 
si m il a r rise to £40m in single 
premiums, compared with rises 
of only 15 per cent for tradition- 
al pensions contracts. 

For the first time, investors 
are putting more into linked an- 
nual premium pension con- 
tracts than into traditional poli- 
cies. 

The growth of linked business 
at the expense of traditional 
business was also seen in life 
sales for the quarter. 

In the quarter preceding the 
world stock market collapse, 
new linked life annual premi- 
ums rose by more than a third 
from £98m to fUSm and linimd 
bond sales climbed by nearly 
half from £Ll3bn to £L66bn. 

For tiie nine months, linked ' 
life sales showed a 30 per cent 
growth in unnhwt premiums to 
£367m and 41 per cent growth in 
single premiums to £4.41bn. 


New Individual 
Life Assurance 
Business (£bn) 



Overall, total new annual pre- 
miums in the third quarter were 
11 per cent higher at £549m 
■ gninrf £496m, and rinrf u pre- 
miums 38 per cent higher at 
£L9bn against £L37m. 

New annual premiums on tra- 
ditional ordinary life business 
show ed a 4 per cent fell from 
£3S7m to £2S7m against the cor- 


However, the third quarter of 
last year was exceptional for 
traditional business, particular- 
ly in sales, of low-cost endow- 
ment contracts for repaying 
mortgages. 

Finally, the figures show that 
traditional industrial life busi- 
ness continues to plod along 
steadily. Such 

business, paid weekly or four- 
weekly ana collected by agents 
at the homes of policyholders, 
showed a 7 pea* cent growth in 
premiums in the third quarter 
from £57m to £81m. 


Nixdorf creates 200 jobs 


BYTBtRYDODSWORlH 

NIXDORF, THE West German 
computer grocp, is planning to 
take on win tpphnifiant and da- 
ta processing specialists in the 
UK next year after expanding 
its workforce . by about the «m«. 
amount in 1987. 

The company's .growth plans 
in Britain also include the 
opening of a £27m headquarters 
in Bracknell, Berkshire, on a 
site close to many other high- 
technology companies. .. . 

Nixdorfj one-- of the fostest- 


growing indigenous European 
computer companies, has a to- 
tal of 750 employees. It has de- 
veloped its business in Britain 
up to now by concentrating oh 
the financial services, retail 
and hotel markets. Clients in- 
clude Tesco and Midland Bank. 

1 The company had a turnover 
of almost £50m last year and Is 
now aiming to broaden its sales 
effort into areas such.as fectory 
and 


automation, 

property^ 


distribution 


Planners 
protest at 
Docklands 
scheme 

By Paul Ch ou mlpiu, 

Property Co nm spondent 

TOWN PLANNERS from the 
Greater London have protested 
to Hr Nicholas Ridley, Am En- 
vironment Secretary, about 
proposals hr a massive shop- 
ping centre mi the derelict 
Royal Decks. 

The London Planning Advi- 
sory C om m i ttee, which repre- 
sents the City of London and 
the London boroughs, has writ- 
ten to Mr Ridley asking him to 
call a public inquiry into a 

scheme put forw a rd by Rose- 
haugh Stanhope Develop- 
ments. 

This scheme includes L47m 
sq A of shopping and leisure, 
embracing 8M,M§ sq ft of 
non-food retailing and 45JN 

sq ft of food retailing. 

The London Docklands De- 
velopment Corporation, the 
planning authority for the Roy- 
al Docks area, is holding back 
from formal approval of the R»- 
sehangh Stanhope proposal on- 
ly because It u a departure 
from previous development 
plans for the area. It has thus 
submitted the scheme to Mr 
Ridley. 

Greater London planners 
have told Hr RMley that the re- 
tail part of the scheme might 
lead to centres such as East 
Ham, Barkis g, Stretford and 
XHbrd losing up to a quarter of 
their present trade. It would, 
they say, damage plans for the 
regeneration of inner and east 
London town centres. 

The LPAC has assured Mr 
vilify ft remains in fa- 
vour of a speedy redevelop- 
ment of Docklands. 

The boroughs, regardless af 
their political persuasion, are 
united in their concern about 
the Reeehaegh Stanhope pro- 
posals, with the exception of 
PfesslsBsn, which la more am- 
bivalent. 

Black Monday 
mags on sale 

A STOKE-ON-TRENT pottery 
company has produced Tve 
Survived Big Bang* and ’Black 
Monday* mugs to naik the 
stock market crash. 

The mugs, produced by the 
Fetters Warehouse, Treatham, 
are on sale in North Stafford- 
shire^ Flans to sell them at the . 
stock wriiMgw shop In Leu- 
den have been abandoned, 
since the shop finds them too 
lighthearted. 


Peter Marsh visits a school with an interest in satellite communications 

Pupils who discover space is the way to go 


A 14- YEAR-OLD boy looks up 
from the computer terminal on 
which he is designing the habi- 
tation modules for a space sta- 
tion and says he would like to 
work in the space industry. 

Olympics Panayiotou is one of 
the 8Q0 pupils at an unusual 
school in London which is try- 
ing with some success to bring 
this area of technology to the 
forefront or Its teaching, at a 
time when the Governments in- 
terest in space research ap- 
pears to be waning. 

'A lot of people think space is 
only about launching rockets* 
says Mr Andrew Wellbeloved, a 
teacher with 10 years 1 experi- 
ence who is technology co-ordi- 
nator at Acton High School, a 
local-authority comprehensive 
in a mixed-income, unfashion- 
able part of west London, a few 
miles from Heathrow Airport 

"Space technology really goes 
wider,' he says. 'You can’t, for 
instance, teach business studies 
without talking about communi- 
cations satellites. We are trying 
to use space technology as a ve- 
hicle for educating our kids 
about the future.’ 

The school is remarkable for 
the ethnic diversity of its stu- 
dents, who are aged between 12 
and 18 and speak 50 different 
languages. Among the countries 
represented at the school are 
Hong Kong, Cyprus, Japan, In- 
dia, Poland, Nepal, and the 
Philippines. 

Such a cultural mix has led 
automatically to an Interest in 
communications at the school. 



Teachers Teuy Hewitt, left, and Andrew Wellbeloved. with some of their pupils and Acton High 

School’s satellite "dish" aerial 


according to Mr Tony Hewitt,' 
the deputy headmaster. Show- 
ing commendable resourceful- 
ness, Mr Hewitt 18 months ago 
obtained a £25,000 grant from 
the Sasakawa Foundation, a 
Japanese philanthropic trust, to 
improve links with Japan. 

The money, matched by a sim- 
ilar amount from the London 
Borough of gating, was used to 


buy a variety of equipment such 
as a satellite 'dish' aerial and 
facsimile-transmission ma- 
chines with which the school 
has set up an embryo electronic 
mail connection with the Gagu- 
kei High School in Tokyo. 

With that hardware - and 
helped by sponsorship dealf 
with companies such as Mitsub- 
ishi Electric and Pitney Bowes - 


the Acton school regularly ex- 
changes ideas and messages 
with the Japanese schooL 
The equipment is helping 
some of the British pupils to 
learn Japanese. Engineering 
blueprints from the Tokyo 
school have been sent over the 
link to program miniature ro- 
bots in Acton, which are used in 
information-technology teach- 


ing. 

Recently, the Acton school 
has extended the communica- 
tions system to set up similar 
electronic interchanges with 
two schools in Illinois. Satel- 
lite-transmitted TV pro- 
grammes from countries such as 
France are used to help in lan- 
guage teaching. 

The school has broadened its 
interest In extraterrestrial ac- 
tivities by buying a computer- 
ised simulation system, origi- 
nally devised by engineers at 
the US National Aeronautics 
and Space Administration, for 
the design of manned orbiting 
bases. 

Exposure to such hardware 
can help students, particularly 
girls, to develop an interest in 
technology, according to 18- 
y ear-old Neena Sharma, one of 
the Acton pupils. 

The students seem to be in no 
doubt about the importance of 
space technology to Britain's fu- 
ture. Peter Hatfield, 14. is par- 
ticularly enthusiastic about Ho- 
tel, the UK design for a 
space-going aeroplane under 
study by British Aerospace and 
Rolls-Royce. 'It's a great idea.' 
he says. 

Tony Bastianelli, 17, has been 
disappointed by the Govern- 
ment’s lack of enthusiasm about 
increasing the country’s space 
budget 

'Space is the foture - it's the 
way to go. If the Government 
doesn’t put money into it 
Britain will become a dot on the 
map.’ 


Cellnet clinches 
Japanese deal 

By Davfcf Thomas 

CELLNET, A UK cellular tele-, 
phone network operator, has: 
made a breakthrough deal ini 
Japan by winning a consultancy 
order for the introduction of a 
new cellular system. 

It Is the first significant over- 
seas business for Cellnet, which 
is owned by British Telecom 
and Securicor. 

Cellular companies believe 
there will be an increasing 
number of International oppor- 
tunities, as feture cellular net- 
works are likely to be based cm 
international standards. 

Cellnet 1 b consultancy contract 
is to help Daini Denden Inc 
(DDD to introduce a cellular 
network into the Osaka-Kyoto 
region, west of Tokyo. 

DDI is udagthe specification, 
known as TACS, used in the 
Jiritiah cellular systems. 


Law Society plan for the 1990s 


BY RAYMOND HUGHES.LAW COURTS CORRESPONDENT 


THE LAW SOCIETY, the solici- 
tors’ governing body, has taken 
another step in its belated, but 
lately accelerated, attempt to 
address the difficulties and 
challenges that will fece the 
profession in the 1990s. 

It has replaced piecemeal 
policy formulation with a stra- 
tegic plan to review and devel- 
op the future of the society and 
of the profession. 

Such a plan was recommend- 
ed by Coopers and Xybrand, the 
management consultants, when 
they reported on the structure 
ana gov e rnment af the society 
last year. 

Coopers suggested that there 
was a need to think hard about 
the pressures on, and opportu- 
nities for, solicitors over the 
next few years, with a view to 
developing a coherent strategy 
to cope with the more .competi- 
tive fixture feeing the profes- 
sion. 


The Law Society’s plan was 
accepted by its managing coun- 
cil yesterday. It looks at the po- 
litical and financial environ- 
ment within which solicitors 
will be working, including the 
effects of regulation, competi- 
tion and consumer protection, 
and suggests how the profession 
might respond. 

It says that although the pres- 
ent economic climate appears 
to fevour business expansion, 
the financial position of many 
solicitors is not good: more than 
140,000 practitioners employed 
in nearly 8,000 firms with a na- 
tional average gross annual in- 
come of only £16,000. 

The plan, prepared by the so- 
ciety’s strategy committee, 
headed by Hr Derek Brad beer, 
the president, notes the move 
away from anti-competitive pro- 
fessional monopolies and re- 
strictions in the UK and the in- 
ternationalisation of legal 


practice leading to increasing 
competition from foreign law- 
yers. 

It recommends employing and 
bringing into partnership for- 
eign lawyers, promoting the 
profession in schools, universi- 
ties and polytechnics - only 50 
per cent of law graduates be- 
come lawyers - and investigat- 
ing ways in which women solici- 
tors leaving the profession to 
have children could be encour- 
aged to return. 

One of the obstacles facing so- 
licitors is the reduction of work 
because of the loss of the con- 
veyancing monopoly. 

The Law Society's strategy in- 
volves the development of new 
sources of work such as advis- 
ing business and individual cli- 
ents on the provision of finan- 
cial services, and advising on 
housing, welfere. Immigration 
and European and internation- 
al law. 


Bulk handler to 
cut workforce 

By Nick Garnett 

MOXEY, the bulk handling con- 
tracting company in the Bab- 
cock group, is cutting its work- 
force of 118 by just over half. 

The Gloucester-based compa- 
ny, which stopped making bulk 
handling equipment this year, 
blamed the state of the market 
for the redundancies. 

. Babcock was recently taken 
r by FKL the electrical and 


said the latest cuts had 
nothing to do with the FKI pur- 
chase. 

A mass meeting of production 
workers at Babcock's boiler- 
making site at Renfrew near 
Glasgow will be recommended 
today to strike. 

Managers at Renfrew, who al- 
so denied that the cuts had any 
conn ection with the takeover by 
FKI, are seeking 475 redundan- 
cies from the workforce of 1,800. 



folent abounds on foessfale. The talent of an industrial 
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advanced areas. Among them - 

IQ chemicals expertise and advanced R & D centre* 

British Steel"* worldwide expertise 

Davy International's worldwide advanced engineering 

IQ, BASF and Phillips Petroleum petrochemicals 
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Nissan Teesside terminal 


...where you hove initiative, talent and ability, 

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With great powers of control over 19 square miles of 

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Board determined to succeed in die regeneration of foe 
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An established gateway to Europe, foesside operates 
the third largest port in the UK 

Through its port and excellent motorway and rail links, 
Ihesside commands a massive population market in 
the UK and on the European mainland. 

Mqfor foreign investment testifies to confidence in 
Ihesside. Already established there - companie s 
from Japan, Hong Kong, Singapore, Germany 
Scandinavia, die Netherlands and the USA. 


lb find out more about foessidefc Initiative, folent 
and Ability: Contact Duncan Hall, Chief Executive, 
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Financial Times Friday November 6 1987 


UK NEWS 



John Gapper reports on the collapse of radical changes proposed for engineering 

Unions reject jobs flexibility 


ENGINEERING unions yester- 
day rejected outright a 
Agreement offering job fleribfl- 
ity in exchange for a shorter 
working week which had taken 
four years to negotiate with em- 
ployers. 

The decision - a personal de- 
feat for Mr mil Jordan, presi- 
dent of the Amalgamated Engi- 
neering Union (AEU) - 
the unions will now try to press 
for a cat in working hoars with- 
out any of the concessions sug- 
gested in the proposed agree- 
ment. 

Dr James McFarlane, director 
general of the Engineering Em- 
ployers’ Federation, said the 
proposals had offered "a con- 
structive way forward for the in- 


dustry and described the rejec- 
tion as 'disappointing.* 1 

The proposals - which would 
have cut the working week for 
nearly 15m manual workers 
from 39 hours to 37% - were in- 
tended to allow individual com- 
panies to find savings^ojom- 

The 11 unions affiliated to die 
Confederation of Shipbuilding 
and Engineering Unions are 
now committed to seek a short- 
er working week without sacri- 
ficing "bard-won conditions and 
practices long-established." 

They will include a claim for 
a shorter working week In this 
year's pay and conditions talk* 
with the employers' federation. 


but are likely to meet a stiff re- 
sponse after the four-year-long 
concession talks were rejected. 

Although the last cut in the 
working week - from- 40 to 89 
hoars - was won' after national 
industrial action in 1979, there 
are some doubts among union 
leaders as to whether members 
would support renewed action 
for another cut 

The confederation executive 
voted by 17 to 13 to reject the 
proposals. An AEU motion to 
return to seek amendments to 
clauses on work flexibility 
which had faced particular crit- 
icism was defeated. 

T hose bac king the AEU were 
the EETFU electricians 1 union 
and Apex, representing white 


collar ytyff Those voting to re- 
ject the proposals included the 
Transport and General Work- 
ers’ union, the GHB general 
anion the manufa cturing 
union Tass. 

Mr Jordan, who had previous- 
ly supported an agreement as' 
the best defence against contin- 
uing decline in the British engi- 

neering industry, said he was 

"extremely disappointed* by the 

outcome. 

^ The proposals wer^ attacked 

clause offering commitment to 
"acting as one body at multi- 
union plants - interpreted by 
some unions as strengthening 
the hand of the AEU. 


Recruiting 
given low 
priority by 


TTTrTiTTT? 


Bills to reform broadcasting 
against bai industry may be staggered 

Ru fVir I riuu.GtaH .... %T V OO 


mass campaign 
against bill 

By Our Labour Staff 

LEADERS of the Trades Union 
Congress are being pressed by 
Mr John Macreadie, the hard- 
left civil servants* leader on the 
TUC general council, to call for 
"maximum mobilisation” of the 
union movement against the 
Government’s Employment BilL 

Mr Macreadie, deputy general 
secretary of the CPSA Civil Ser- 
vice union, has tabled a resolu- 
tion proposing that the TUC 
draw up a "programme of ac- 
tion* p nlminutiiig In ]l "Bt BBS 

demonstration.* 

There is scarcely any chance 
of the TUC agreeing such a 
plan. But it shows that Mr Ma- 
creadie, a supporter of Militant 
Tendency, will not be deterred 
from campaigning for confron- 
tational policies, regardless of 
the prevailing political and in- 
dustrial climate. 


BY JOHN GAP PER 

THE GOVERNMENT will prob- 
ably have to introduce two 
broadcasting bills within the 
next couple of years rather than 
the single comprehensive bill 
originally planned, Mr Douglas 
Hurd, the Home Secretary, said 
yesterday. 

The Government bad Indicat- 
ed it wanted to introduce a bill 
next autumn covering both ra- 
dio and television to create a 
structure for the broadcasting 
industry designed to take it into 
the next century. 

Mr Hurd told the Television 
and Radio Industries Club in 
London yesterday: "Not all the 
dishes on menu have the same 
cooking timM. You should not 
necessarily assume that a single 
gargantuan bill would be the 
only way of serving the feast* 

The Home Secretary empha- 


sised he believed it would be 
wrong to delay setting up the 
Broadcasting Standards Coun- 
cil- the body the Government 
wants to be a focus for com- 
plaints about portrayal of vio- 
lence and sex in society. But de- 
cisions on other broadcasting 
issues such as the feasibility of 
a fifth channel or of local micro- 
wave television would depend 
on technical evaluation and far- 
ther detailed policy evaluation. 

The Gove r nment published a 
green paper (discussion docu- 
ment) on radio in February, sug- 
gesting the creation of up to 
three national commercial ra- 
dio eh»niM-i« and opening the 
way for several hundred local 
community stations. Ministers 
make it clear that legislation is 
likely to stick closely to green 
paper proposals although de- 


tails COUld 

It is not yet clear whether con- , 
troversial proposals for the re- 
form of the Independent Televi- 
sion (TTV) franchise system, 
including the possibility of a 
form of auction, will be ready 
for early legislation and the 16 
ITV companies may face a fur- 
ther period of uncertainty over 
their fate when present extend- 
ed franchises run out at the end 
of 1992. 

up emphasised »piw that al- 
though he wanted to preserve 
quality in British broadcasting 
standards, there was a need for 
"broadcasting faelled by adren- 
alin, not formaldbyde." 

He also warned that the Gov- 
ernment was looking hard at 
ways of dealing with any "unac- 
ceptable programmes" which 
might be beamed wriuin 


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Ford unveils radical 
mini-managers plan 

BY CHARLES LEADBEATER, LABOUR STAFF 


FORD MOTOR Company yester- 
day unveiled proposals for its 
white collar unions, which in- 
clude the introduction of "area 
foremen* who would become 
mh>s.iMn« gi»f« on the shopfloor 
with a wide responsibility for 
different aspects of production. 

The three-year offer made it 
clear that this plan would be 
central to a fundamental 
change in manu gn wiant struc- 
tures at plants. 

' This, combined with 
fci u nwirh ing changes to 
working p r a ctice s , would move 
plants away from the strict divt- 
sion of labour and pyramidlc 
management structure of the 
"classic" Ford production line, 
towards production through 
more autonomous groups on the 
shopfloor. 

The pay offer, which would 
set the pay of 12500 white collar 
workers, mirrored the offer to 
manual work er s last week: an 
increase of 425 per cent from 
♦M* November, followed by in- 
creases linked to the iwflitf M 
rate in 1968 and 1989. 

The company told the white 
collar unions, ASTMS, Tass, and 
ACTSS, yesterday that it wanted 
the area foremen to take re- 
sponsibility for production 
within a much larger area of the 
plant than current foremen. 

Area forem e n would co-ordi- 


FORBES SECURmES MANAGEMENT C E” 


Pay plan Post office 

linked to workers in 
work value strike vote 


nate production, skilled mainte- 
nance. machine inspections, 

Mtenil handling and Janitor !. 

al functions. Many of these tasks 
have normally been controlled 
by specialist foremen who or- 
ganised the supply of services 
to production foremen. 

. The company envisaged area 
foremen becoming managers of 
their area in the plant rather 
than merely enforcing rules 
laid down by senior manage- 
ment or coQective agreements. 
Ford also wanted to open up re- 
cruitment to the post to any suit- 
able salaried employee. 

The company told the unions 
it wanted to end the so-called 
*1840-1" rule which restricts the 
number of workers a foreman 
can be responsible for, and 
which abolishes senior and re- 
lief foremen grades. These 
moves may lead to significant 
job losses among foremen. 

Beneath area foremen, group 
leaders recruited from manual 
workers would manage produc-* 
tion teams of skilled and semi- 
skilled workers. 

In common with the offer to 
manual unions. Ford wanted 
the white collar onions to com- 
mit themselves to a quality im- 
provement manifesto at each 
plant, backed by quality discus- 
sion groups, akin to quality cir- 
cles at all levels of the company. 

Post office 
workers in 



By JkmnyBunisJnbour Staff 

NATIONAL Carriers Contract 
Services (NCCSK a division of the 
National Freight Consortium, is 
extending a novel performance- 
related pay scheme nationwide 
in a move feat could bring fur- 
ther changes to the competitive 
road haulage industry. 

The initiative, which has the 
support of the National Union of 
Raflwaymen (NCR) on behalf of 
the the audority of NCOS’s 1500 
workers, futews the success of a 
pilot scheme at the company’s 
Swindon depot in Wiltshire, 


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Under the scheme, overtime 
pay is serapped and drivers are 
pud «n foe basis of the value of 
the work done and not on the 

Mnw ywt jliilnp lt 

A taste pay "marker" will be 
retained by the company for cal- 
culating pensions and holiday 
eotittaMBts. However, the per- 
formance-linked element of the 
scheme - the 'standard hour 
plan” - is to be the core of future 
pay. and conditions agree men ts 
within the company. 

The scheme’s extestien comes 
at a time when retailers are un- 
dergoing customer-led internal 
reorganisations to Improve effi- 
ciency. 

The NCCS said yesterday the 
standard boar plan weald help it 
become more effective in im- 
proving distribution and Is help- 
ing^ the company to overcome the 
'age-old problem* of how to man- 
age drivers’ time on duty! 

Computerisation by NCCS off 
the "hours earned” is expected to. 
help the company provide de- 


By Our Labour Staff 

THE UNION of Communication 
Workers (UCW) yesterday pre- 
dicted its 162.000 Post Office 
membere-wouJd vote heavily for 
industrial action. In a ballot 
which started last week over the 
union's claim for a reduced 
working week. 

The result is due on Novem- 
ber 17. Under the Government’s 
trade onion legislation, the 
union has to implement indus- 
trial action within 28 days, in 
the run up to Christmas, or lose 
its mandate. 

Mr Alan Tnffin, UCW general 
secretary, said the poll was 
drawing a large turnout More 
than a third of the branches 
have already voted. 

I The union’s executive com- 
j mittee wOI decide what form 
the industrial action should 
I take after a meeting of UCW of- 
! ficials after the result is an- 
i nounced. Mr Tuffin said the 
leadership would consider a 
| number of options, including an 
; overtime ban, withdrawal of 
goodwill, or selective strikes oF 
between one and three days. 

These selective strikes at key 
sorting offices could quickly 
paralyse the postal network. It 
is likely the Post Office would 
only allow postal staff back to 
work after signing undertakings 
that they would work normally. ■ 

If the union, instructed its 
members not to sign the under- 
takings, and the Post Office re- 


3 


■For toe future, keeping stan- 
dards within the plan properly 
maintained Is the key to ita con- 
tinued relevance; Its flexibility 
wQl mean that we can accurately 
plan for, rather than react to, 
in distribution strate- 
gy,” toe NCCS said. 


sponded by locking them out, 
there would be mounting pres- 
sure for an all-out stoppage 
Mr Tuffin called on the Post 
Office to accept that the dis- 
pute, over a three-hour cut in 
the working week, should be re- 
ferred to arbitration. Mr Ken 
Young, Post Office head of in- 
dustrial relations, said any re- 
duction in working time would 
have to be achieved through a 
negotiated agreement. 


By Ml Bp naaiaft, labour EdBor 

TRADE UNION officials speed 
only 18 per cut off their time 
trying to recruit new mem- 
bers, according to the results 
ef a forthcoming academic sur- 
vey of hvw British untea offi- 
cers work. 

The study, by Dr John Kelly 
and Mr Ed Hemy off the London 
School of B o o n — i re, indicates 
that unions bt the UK may face 

considerable operational diffi- 
culties In achieving the new 
target of same sff a much great- 
er emphasis on membership 
recruitment to try to stove off 
c on t in uing h^ihml 

liniHug mainly at the large 
general unions such as the 
TGWU 


■ i. 



Recruitment that 
achieved, DrKeQy said, main- 
ly takes the form either of a re- 
sponse to employee demand, 
where non-union wor k ers, hav- 
tng difficulties with their em- 
ployers, contact unions for as- 
sistance and are then 
recruited; or of drawing in 
wor ke rs an the margins off an 
olwooay^ egowlooa WOOfc fo g BS. 

The work patterns of union 
officials, and their commit- 
ment to servicing already-u- 
nionised employees, are likely 
to preclude wider attempts at 
recruitment in unorganised 
establishments. 

About s third af the union of- 
ficials s nr t oy e d - local 

officers - saM they would like 
to spend more time on recruit- 
ment of members, although 
lnoihif at union objectives, 50 
per cent said the prime objec- 
tive for unions should still be 
the wages and conditions af 
members, with only 29 per cent 
saying it should he recruit- 
ment. 

Taken with other evidence, 
the study suggests that al- 
though' the number of mim 
members hat declined - 1MB 
saw a rattan of one local onion 
official to 1,5— members, con- 
pored with one to 4AM In 1989 
- toe decentralisation af bar- 
gaining has that union 

officials have more member- 
ship units to service, which 
cuts down their time to de oth- 
er work such as recruitment. 

Dr Kelly suggested that spe- 
daTblltskrleg* recruitment 
campaigns were unlikely to 
produce many new member s 
and that even if they did, 
unions were frequently insuf- 
ficiently capable of following 
up such drives in order to re- 
tain members after they have 
bees recruited. 


r i w 


Jj^T/ 


■ 


further enhance your enjoyment of one of Cairo's most ultra- 
modern hotels. 

Just book more than 1 8 hours in advance for a stay of three 
nights or more, ask for the Premium Plus programme and well 
gfoeyouf- 

* A double room for the price of a single. 

* A complimentary bottle of Scotch in your room. 

St Daily complimentary American buffet breakfast 

* 25% discount on all purchases at the Ramses Hilton ’Saad of 

Egypt - silver gift shop. ' * 

St A undiriona] .silver cartouche, free with each purchase from 
‘Saad of Egypt '. 

And, in addition to all these benefits, you'll enjoy the 
facilities of one of Cairo’s finest hotels; luxurious guest rooms, a 
comprehensive business centre, health dub, swimming pool, 

■ superb restaurants, and magnificent views from our bar and 
lounge on the 36th floor. 

Finally, our Executive Floors provide a new dimension in 
luxurywiththeirown Concierge, the convenience of an 
expedited and separate check-in and No Stop Check-Out service, 
and a private lounge, where you can enjoy complimentary 
: continental breakfast, cocktails and canapes. 

Enjoy the Ramses Hilton-andall the extra henefiisof our 
Premium Pius package ioa 

> For reservations, call your travel agent, any HUton International 
botetorHUtonResenvaionSen'ice-tn London 631 1767 and 
elsewhere in tbe (JJL Freefane2J24. 




Ramses Hieton 

Interest Rate Change 

AlKed Irish Banks pic announces that with effect 
from close of business on 5th November 1987, 
its Base Rate was decreased from 9Vz% to 9% p-a. 


(X) Allied Irish Bank 


Head Office — Britain: 64/66 Coleman Street, London EC2R 5AL. Tel: 01-588 0691 
and branches throughout the country. 


National 
Westminster 
Bank PLC 


NatWest announces that 
with effect from 
Thursday 5th November 1987 
its Base Rate 
is decreased from 
9.50% to 9.00% per annum. 

All facilities (including regulated consumer credit 
agreements) with a rate of interest linked to 
NatWest Base Rate will be varied accordingly. 

41 Lothbury London EC2P 2BP 


Hill Samuel 


Delama in, mon viettx, your co g nacs label 
loots somewkat reserved.” 

“I tave reservations about sellin g it at all.** 



Pale & Dry. The Grande Champagne Cognac from ! 
the ancient Delamain family. Matured in 
tranquility for a generation. 

Recommended by connoisseurs with- 
out reservation. 

GmrfcCtwnp^wrngnw 


CORRECTION 

With effect from the dose of business on 


5th November, 1987, Hill Samuel’s Base 
Rate for lending will be decreased 


from 9.5% to 9% per annum. 


DB 


Hill Samuel & Co. Limited 

100 Wfood Street London EC2P 2AJ. 
Telephone: 01-628 8011. 


Girobank 


Girobank ptc announces that with 
effect from dose of business 
Thursday November 5 1987 

Base Rate 

Its base rate was reduced from 
9.5% to 9% per annum 

Other futilities 0nduding 
regulated consumer credit 
agreements) with a rate of 
interest linked to Base Rate will 
be varied accordingly 


Girobank pfc 10 Milk Street LONDON ECZV 8IH 









12 


Financial Tunc* l ; nJa> Nmcwhcrft- 1W 


Plan approved for £160m 
Shotton redevelopment 


BY PAULCHEESEMQHT AND ANTHONY HORETON 


THE DERELICT site of tile old 
Shotton steelworks on the Dee 
Estuary in north-east Wales is 
to lire again as a regional shop- 
ping centre, marina, water pan 
and business centre. 

Formal proposals by Tarmac 
Construction for a £ 160 m rede- 
velopment of tiie site on 230 
acres will be announced today. 

Clwyd County Council gave its 
general approval to the scheme 
yesterday. Alyn and Deeside 
District Council, meeting yes- 
terday evening, was expected to 
follow suit 

The two authorities have had 
a Joint steering committee for 
the project It was unanimous in 
recommending that the Tarmac 
scheme should go ahead. 

The councils have been sap- 
ported by the Welsh Develop- 
ment Agency, which provided 
them with technical appraisals. 
"It would be marvellous for the 
whole region - not just 
north-east Wales but North 
West England as well,* said Mr 
Philip Head, the WDA’s proper- 
ty services executive director. 

The Tarmac plans for Shotton 
spring out of the failure by the 
local- authorities to win the Nis- 
san car plant that eventually 
went to Tyne and Wear. The au- 
thorities had also promoted the 





sit e, but unsuccessfully, for the 
Wales garden festival. 

None the less, Clwyd County 
Council sees the reclamation of 
Shotton as prat of a two- 
pronged campaign to develop 
the north-east Wales economy. 

The other prong involves in- 
dustrial development In a sep- 
arate move, the county council 
yesterday opened a new tech- 
nology park at Wrexham and an- 
pwiTigri a 25 acres extension. 
Wrexham is the home to plants 
of Brother, Hoya Lens and 
Sharp, all Japanese companies. 


Tarmac's scheme is linked to 
the construction of a third 
crossing over the Dee. A combi- 
nation of the two, said Mr Bill 
Rogers, the Alyn and Deeside 
District Council chief execu- 
tive, "would open up an area off 
the beaten track." A new cross- 
ing would tie the Dee Estuary 

area more closely to the Wlrral 
and Merseyside region. 

The shopping and marina 
scheme would be complementa- 
ry to an adjacent industrial 
park originally developed on 
200 acres by the Welsh Develop- 
ment Agency and British SteeL 
The WDA has just purchased 
from British Steel a farther 300 
acres to expand the park. 

With approval in principle for 
the Shotton scheme from the lo- 
cal authorities. Tarmac win be 
able to seek formal planning 
consent It is unlikely that the 
wo ik would be completed be- 
fore the mid-1990s. 

Tarmac, which has so for re- 
fosed to provide details of its 
plans, said 3£00 jobs would be- 
created. That is less than half 
the number of jobs lost when' 
the steelworks closed in 1982. 

The focal point of the plan is' 
said to be a 750,000 sq ft 
ping centre, with a 
close by. 


Farm woodland plan outlined 


BY BMDGET BLOOM 

GOVERNMENT POLICIES to 
reduce surplus crops by remov- 
ing fond from arable production 
were taken a step ftarther yes- 
terday when Mr John MacGre- 
gor, the Minister of Agriculture, 
announced details of a new 
Farm Woodland Scheme. 

The scheme, provided for in 
the Farm Land and Rural De- 
velopment Bill, is designed to 
encourage owners of arable 
T«wd to plant trees instead of 
growing cereals or instead of 

main tain tog gr assland for milk 
or beef production. 

Grants of up to £190 a hectare 
a year will be paid for between 
20 and 40 years, depending on 
whether formers plant quick- 
growing trees such as forehand 
pine or the slower-growing 
broadleafoak and beech. 

To prevent the witahiiriimwit 
of big plantations on poor land 
by wealthy formers or other in- 
vestors, as has happened In 
Scotland in particular, grants 
will be given for a minimum of 


three hectares and a maximum 
of 40 hectares. 

In the first instance the Gov- 
ernment intends to apply the 
scheme to 12^)00 hectares a 
year, which might involve plant- 
ing 30m trees a year. It intends 
that the new woodlands should 
be at least one-third broadleaf 
trees. 

Mr MacGregor told a press 
conference yesterday that while 
the scheme would cost some 
£10m a year, he hoped that in 
time it would actually save mon- 
ey by reducing surpluses. Al- 
though its announcement now is 
coincidental, he hoped it would 
be welcomed particularly by 
farmers in the south-east, who 
had lost many trees in the Octo- 
ber strains. 

The form woodland scheme is 
one of a range of new measures 
designed to give farmers alter- 
native ways of making a living, 
given the current effort within 
the European Community to re- 
duce the huge form surpluses. 


The intention to help formers 
diversifr was announced last 
spring in the so-called Afore 
package (Alternative Land Use 
and the Rural Economy) jointly 
sponsored fay the Agriculture 
Ministry and the Department of 
the Environment 

The proposed measures range 
from grunts for farmers to diver- 
sity into non-surplus crops or to 
build up amall form-based in- 
dustries or tourism, to the es- 
tablishment of so-called envi- 
ronmentally sensitive areas. 
The initial cost is put at £25xn in 
a foil yean 

The Government also intends 
to introduce shortly a separate 
foetasideT programme under 
which formers would voluntari- 
ly reduce production by 20 per 
cent. This week's autumn finan- 
cial fop Writ tint 

costed this programme, which 
would primarily apply to cere- 
als, at £20m for 186849 and 
£22m for 1969-901 



Move up to luxury plus in Cairo. 

\/a 



3 IIIL I M a 

Soy at the Ramses Hilton, and let our Premium Ptuspadcage 
further enhance your enjoyment of oneofCUio's most ulna- 
modem hotels. 

Just book more than 18 hours in advance fbrastayof three 
nights or more, ask for die Premium Plus programme and well 
give you 

* A double room for the price ofasingle. 

* A complimentary botrieof Scotch in your room. 

* Daily complimentary American buffet breakfast 

* 25% discount on all purchases at the Rainses Hilton *Saad of 
Egypt' silver gift shop. 

* A traditional silver cartouche, free with each purchase from 
“Saad of Egypt'. 

And, in addition toall these benefits, you’ll enjoy the 
facilities of one of Cairo’s finest hotels; luxurious guest nx>ms,a 
comprehensive business centre, health dub, swimming pool, 
superb restaurants, and magnificent views from our bar and 
lounge on die 36th floor. 

Finally, our Executive Floors provides new dimension In 
luxury with their own Concierge, the convenience of an 
expedited and separate check-in and No Stop Check-Out service, 
and a private lounge.whereyou can enjoy complimentary 
continental breakfast, codaaiisand canapes. 

Enjoy the Ramses Hi hon - and all the extra benefitsof our 
Premium Plus package too. - 

Forreservattons, caByour travel agent, any Hilton International 

botelorHilicmReseri’atioriSeriice—tnLDndon 631 1767 and 
elsewbereintbeUJC Freefone 2 J 24. 

Ramses Hilton 


K 


XT 


\ 


/ 


W 


PM- 




M 



UK NEWS 


Recession 
‘would 
slow house 
price rises’ 

FhmncM Tinea Reporter 

A WORLD reeessten following 
hard <m the heels of the recent 
stock market foils weald poae a 
threat to tiw UK hearing mar- 
ked, Britain's biggest buflfiag 
society said yesterday. 

The Halifax said, h ow ev er, 
that foe plunge in share prices 
alne was unlikely to have a 
significant impact an ho use 
prices apart from at the “top 
end” of the market in Landon 
and the south-east 

It sakl growth prospects in 
the UK might be itepeesmed by 
a slump in foe US eeswuy, a 
slowdown in world growth and 
a decline In d omesti c consum- 
er spending cau s ed fay lower 
share prices. 

“Since real Income growfo Is 
foe most important i nfl ue n c e 
behind house prices, static or 
foiling real incomes weald 
lead to slower house pri es la- 

the H«Hfar «ri<. 

The society remained confi- 
dent that price rises In the 
I remain in deride 
figures next year, 
of the Gevenunenfs 
determination to avoid a reces- 
sion by catting interest rates. 

Wednesday’s half-point cut 
in base rates p ro mp t e d an im- 
mediate cut in the Halifax's 
mortgage rate from LUES per 
cent to 163 p er c e nt. 

It said movements in house 
prices had not fa foe past been 
closely linked to changes in 
the stock market, although 
there would he same Impact tat 
certain Individuals. 

“If the crisis persists and 
leads to redundances, particu- 
larly in the City, those faring 
their jobs and finding it diffi- 
cult to suppart their mortgages 
may seek to sen their proper- 
ties. There could also be a psy- 
chological imps* 1 * on house 
prices, particularly the top end 
of the London market,” foe 
Halifax said. 


The Halifax's monthly ! 
price index, out yesterday, 
showed foot East Anglia was 
still recording the fastest 
gro w th in house prices — np 
•mere than 27 per cent) 


al slowdown in Greater Lon- 
don, where the rate if increase 
has came dawn to 22 per cent, 
but a slight acceleration in the 
south-east to almost 25 per 


Overall, bouse prices In foe 
CK rase hy 145 per cent In the 
year to the end of October, 
stighOy down on the 14S per 
cent recorded in September, 
hut stffl well ever three. Haws 
the rate of inflation. 

The Halifax said that ean- 
firmed foe levelling in prices 
that has been evident t hr o ug h- 
out 1987. 


Trade restricted 
for ‘few firms’ - 

THE STOCK EXCHANGE yes- 
terday cee filmed that a few 
firms have been told that their 
trading wfll be restricted from 
this month nntfl their settle- 
ment backlogs have improved. 

A statement said the firms 
would the ms e l ves decide haw 
to impose the restrictions. The 
exchange weald "continue to 
monitor these firms closely 
and will regularly review 
whether the restriction should 
be continued." 

The settlement task fare* 
emphasised that the decision 
to Implement trading restrie- 


ing many 
to recent 


wt i 

in no way related 


Sales of new cars might reach 2m 


BYJOHNGHFFUm 

THE MARKET for new cars in 
the UK is within reach of 2m 
nntta in a ring fa year for fot 

first time in its history, in spite 
of the stock market collapse. " 

Spokesmen for the volume 
motor manufa cturers, w wawwit. 
ing yesterday on October regis- 
trations, which were up 82ft per 
c ent on the ****** mrmtK tut 
year, said waiting lists of eight 
to 12 weeks for new care meant 
that any advene effects from 
the collapse were unlikely to 
show up fa time to have any no- 
ticeable impact on this year’s 

Sales in the last two moufii* of 
the year now need to be up only 
5.4 per cent on the same period 
last year for the 2m threshold to 
be reached. If they remain pre- 
cisely at last year’s level, total 



1987 

.. % 

UK CAB REOSTKATOW 

October 

1986 % 

% 

to tote 
1906 

% 

Tstalmartet 

UK protocol 
Imports 

244Q54 

69378 

74684 

10000 

48J6 

5L84 

133082 

60534 

72548 

100-00 

45j49 

54-51 

1781185 

919903 

10050 

4839 

5L6» 

167490 

736X41 

94024 

toe 

<159 

tt/Q 

Fari 

Barer Uroap 
VriHdmWOpd 

icfii 

22743 

21796 

25.61 

ISM 

1503 

34806 

19051 

19803 

2605 

1432 

1458 

908889 

271485 

239842 

2853 

1324 

3347 

454070 

269209 

253357 

2751 

3*07 

15J3 

PcogeotfCttroea 

lOssaa 

AatoVWSeat 

Volvo 

Fiat/Atfa/Ueda 

11172 

tan 

>742 

4243 

4796 

5134 

7J5 

418 

657 

2.95 

353 

336 

8651 

10487 

6520 

3192 

5735 

5306 

650 

738 

640 

240 

*29 

3.98 

230255 

98395 

105434 

70596 

61324 

66202 

751 
552 
5.91 
3.96 
. 144 

3.72 

106756 

96176 

104535 

61402 

59110 

640 

5J4 

fc» 

SAT 

351 

353 






Sara sacfctr « im 

WIMM 



short of the 2m mark 

In the first 10 months of the 
year, regi str a tion s were np &34 
per cent on the same period of 
1966 • itself a record year - at 
1,7814*5 from 1^74,965. In Octo- 
ber itsel f , registrations were up 
824 per cent to MftJSft'frum 


1333)82 a year ago, according to 
Society of Motor Manufacturers 
and Traders statistics. 

Far from there being an ob- 
servable fall-off at the end of 
October after the markets slide 
was well under way, early No- 
vember registrations remained 
well np on last year* said an 
SMMT spokesman. 


In spite of the relative opti- 
mism about the rest oftirisyear, 
predictions of a downturn -in 
1988, although not necessarily a 
severe one* were widespread 
among the car companies yes- 
terday. 

An official at Ford suggested 
that while "obviously some at 
foe yuppie’ end of the market 


doesn’t necessarily mean (hem 
losing their company cars.* 

The share of the increasing 
market being taken fay im p orts 
is continuing to decline. Im- 
ports accounted for 5L84 per 
cent of sales in October, com- 
pared with S451 per cent in the 
same month last year. 


Four suspended by Lloyd’s 


BY MCK BUNKER 

A FIVE-YEAR episode of disas- 
trous underwriting at Uqyirs of 
London has led to y wp *** - 
rion from the Lloyd's market of 
a marine underwriter and three 
insurance brokers. 

Lloyd’s said yesterday tint it 
1 i«h banned Mr Philip Hoff 
Marsh, Mr Gerald Roystan Lio- 
nel Becker, Mr James Stuart 
Scott and Mr John Richard Caa- 
tonxia from — d w ri l h l aw do- 
ing business at Lloyd's far 18 

tnnntfuL A fifth nwn, Mr Bryan 

Spencer, has been suspended 
far 18 months fr om earning on 
business as a member of 
’s. 

'% said it had found all 


Mr Spencer were employed as 
professional underwriters by 
two Lloyd's syndicates. 

Mr Marsh was the underwrit- 
er for syndicate 420, which was 
run fay the former Oakefay 
Vaughan underwr i ting agency. 
Mr Spencer worked for syndi- 



July 1962, when Ur 


A White, a subsidiary of' 
Faber, the insurance broker. 

It later emerged that both syn- 
dicates had run np large trading 
losses. Liard's Hw» miscon- 
duct involved foe use of "bind- 
ing authorities,' ar r an g eme nts 
fay which a Uoyd*s syndicate al- 
lows an insurance broker to ac- 
cept business an its behalf 

Hie use of bunting authorities 
by syndicates 420 and 885/896 
■wilt that they accepted a c m e 


North American insurance 
business that turned out to be 
'disastrously unprofitable,* 
Lloyd’s found. 

Mr Marsh and Mr Spencer 
were found guilty of giving 
binding authorities 'drawn in 
unreasonably and irresponsibly 
wide terms." Mr Becker and Mr 
Scott, who ran a Lloyd's broking 
house, plea de d guilty to two 
riiaiywi |rn»1ndlng an allegation 

that they failed to tell Mr Marsh 
and Mr Spencer important facts 
about the business accepted un- 
der foe binding authorities. 

Mr Cantooris, another broker, 
pleaded guilty to falling to 
make a proper a ss es s men t of 
business he brought to Mr 
Karsh ami Mr Spencer. 


Bell Atlantic expands into Europe 


BY QAVD THOMAS 
BELL ATLANTIC, one of the 

l»rw» ITS regional telephone 

companies, is making a push in- 
to computer maintenance in the 
UK ih# Continent by 

buying se ve n companies in the 
field. 

Together with its large US op- 
eration, Bril Atlantic believes 
it now ranks as foe world's lar- 
gest independent computer 
maintenance company. 

Computer maintenance is « 
fast growing and profitable sec- 
tor, although computer manu- 
facturers axe increasingly try- 
ing to win business in the area. 

Bril Atlantic, which last year 
had a' net income of $L47bn 
(E670m) on sales of 9822bn. was 


known to be keen to develop 
computer maintenance 

operations in Europe, where so 

tlir lt liM llwl» l m«ii«— 

Bell Atlantic made the pur- 
chases fro m Sfil C anada Entss 1 - 



The largest of the companies 
acquired is Bell Technical Ser- 
vices, one of the biggest inde- 
pendent UK «impnt» mainte- 
nance groups: 

BeQ Technical Services has a 
staff of 250, including g 5 o engi- 
BTwi , o p erating 
UK. 

Bril Technical Services does 


not publish its turnover, but the 
last figures, lodged in Compa- 
nies House show losses of £L5m 
on sales of £l02mfor 1989 l The 
said the loss was 
ca u s e d by special factors and 
that it moved into profit last 
year. 

The other companies includ- 
ed in the which was 

bought fay Bril Atlantic in a 
cash deal for an u ndisclosed 
price, are Bril (UK) Services, a 
British data mwbpmiI m H wm 
outfit, and five co mp uter main- 
tenance companies on Con- 
tinent Eurotechnlea in France. 
Euretec h ut Italy, and Dataway 
in Switzerland, Austria and 
West Germany. 


Rifidnd stresses relevance 
of ‘strategy for Scotland’ 

BYMCHAH CAIWni^OUnCALCORHEBPONDBir 


INCENTIVE and responsibility 
were the t win pi llars of the Gov- 
ernments strategy for its third 

h »i m | Iff Malmlm BfWnil thw 

Scottish Secretary, said yester- 
day. 

Mr Bifidnd, speaking at Gle- 
aaagtes during the internation- 
al forum of the Scottish Council, 
Develo pm e nt and Industry, ad- 
mitted that the Government's 
objectives for its third term 
would be more difficult to 
achieve, but riainwH they 
would be of particular rele- 
vance to Scotland. 

He cited income tax reduc- 
tions and foe of enmtrfi 
house* as evidence of the Gov- 
ernment's drive to improve in- 


centives and rejected sugges- 
tions that such reforms were not 
a ppropr i ate or popular in Scot- 
land. 

He said: "It is suggested the 
Scottish character Is less mate- 
rialistic, more egalitarian and 
more attracted to collectivist 
social and economic policies. 
This school of thought suggests 
that ’Thatcherism* is only at- 
tractive to the English charac- 
ter. which is assumed to be of a 

mnnM * 

- Mr Riftind said the Govern- 
ment intended to pursue re- 
forms that were as relevant to 

fif ft tt l sh »nH in- 

dustrialists as they were to oth- 
er Scottish citizens. 


Spycatcher trial 
delay bids fail 

By Raymond Hu ghes, 

Law Courts Conre po n dant 

THE GOVERNMENT failed yes- 
terday in attempts to postpone 
until January the foil trial of its 
claim for a permanent ban on 
press* reports of allegations 
made fay Mr Peter Wright, a for- 
mer MEi officer, in his book Spy- 
catcher. • • • 

Sir Nicolas Browne-WiDrin- 
son, the Vice-C h ance l lor, said 
he would defer the case against 
The Guardian, The Observer 
and The Sunday Times only un- 
til November 23, Instead of No- 
vember 1& The Court of Appeal 
later dismissed an appeal by 
Ibe Attorney-General, Sir Pat- 
rick Maybew, against that deci- 
sion. 


Woolwich 
to get £57m 
tax refund 

ByHDgoDfamn 

WOOLWICH Building Society 
will receive a cheque tor £57m 
from the Inland Revenue today, 
but the tax authorities will be 
appealing in the courts to try to 
get the money back. 

The payment relates to tax 
taken by the Revenue from the 
society in 1985-86. 

The Hirii Court ruled in July 
that the Revenue had taxed the 
Woolwich twice but had no right 
to. 

However, after the ruling the 
Revenue refased to raftand 
Woolwich the cash, saying it 
would only do so if the society 
gave a legally binding undertak- 
ing to repay the money, plus in- 
terest, in the event of an appeal 
going the Revenue’s way. Wool- 
wich has now given such an un- 
dertaking. 

Woolwich is pnrauixxg a sepa- 
rate action against the Revenue 
for about £8xn in interest it 
it is owed since it paid 
the£S7m. 

That case la expected to be 
heard later this month. 

It is not dear what effect foe 
Revenue's decision to pey Wool- 
wich will have on other societ- 
ies that believe they have been 
taxed twice. 

If the Reveue were to repay 
every society it is estimated that 
the total coat would be £600m, 
hot it would be able to claw 
some of that back in higher cor- 
poration taxes. 

Leeds Permanent, which sup- 
ported Woolwich in its original 
case, said it hoped the Revenue 
would repay its tax without a 
farther court case. 

However, the Building Societ- 
ies Association, the industzy's 
-trade body, said it was likely 
that 'the Revenue would wait 
until after its appeal before de- 
ciding whether to pay other so- 
cieties. 


Talks on food laws 
to be extended 

THE Government is to extend 
its talks on rerising food laws. 
An earlier consultative docu- 
ment on foe Food Act 1964 has 
been examined by Government 
ministers 

Further talks will concentrate 
on tightening controls over con- 
taminated or unfit foods (in- 
cluding imports), the opening of 
new food businesses, the need 
for controls on the aevriopeut 
of novel foods 


Maurice Samuelson on the possible hazards of privatising a power utility 

Sparks fly over electricity price rises 


IN THREE weeks, leaders of 
Britain’s chemicals industry are 
scheduled to hold a meeting 
with Mr lffichari Spicer, foe ju- 
nior minister in charge of elec- 
triclt y. at foe Department ofEn- 

meeting was originally 
expected to be a friendly chat 
on the implications of privatis- 
ing the electricity industry, on 
which ifco piiAmiwiU manufac- 
turers have adopted a position 
ranging foomn positive neutrali- 
ty to outright sympathy. 

The meeting may turn out to 
be less friendly than e xp e cte d 
after the announcement of 
forthcoming price increases. 
The issue of privatisation is 
likely to be overshadowed by 
faeindurtxy's anxieties, border- 
ing on consternation, about the 
likely effect of the increases on 
its commercial performance. 

Mr Spicer and Us chief Mr 
Cecil Parkinson, are already 

hearing similar p rot e sts from 
other manufacturing sectors for 
whom electricity is a principal 
component of their production 
costs and for whom significant 
price rises would seriously af- 
fect their prospects over tiw 
next few years. 

They fear that a privatised 
electricity industry mil use its 
muscle against them as rigor- 
ously as British Gas which. In a 
series of protests to the Office of 
Fair Trading, they have accused 
of acting against the public in- 
terest fay abusing Its monopoly 
power now that it has entere d 
the private sector. 

Some of foe energy-intensive 
industries, such as steel, claim 
that similar fears are spreading 


Industrial electricity prices 
October 1987 


V 

| 







Belgium Italy n W.Gannany .Sweden 

Fiance Netherlands feftah 
oo mnny rt pqwr and bond pM odns 29te far fom I5fnnadqr 


among their state industries in 
Europe, which are watching 
carefully to see whether their 
g overnments imitate Britain's 
example of releasing powerful 
fed utilities on to captive mar-, 
kata. Such a development, it is 
claimed, runs contrary to the 


European C ommunit y's stated 
aim of opening np energy mar- 
kets throughout the member 
countries. 

Paradoxically, foe anxieties 
of British industrialists have 
arisen at a time when, fay com- 
mon consent, British el e ctric i ty 


prices are satisfactory and even 
advantageous compared with 
those in several other coun- 
tries. 

The Electricity Council point- 
ed out yesterday that, for the 
general industrial customer, 
prices in England and Wales 
are among the lowest In Europe 
and even the large, energy-in- 
tensive users are m the mid 
range. But it has yet to persuade 
its customers that even after the 
proposed increases, tariff* 
would remain "In the lower end 
of the range" of world prices. In 
the paper and board industry, 
electricity accounts for an aver- 
age of 8 per cent of production 
costs, and sometimes as much 
as 15 percent. 

Electricity prices for British 
paper mills, using between 
ZMW and 25MW, are at pres en t 

fay thefr^ competitors in ^ 
glum, France, Italy, Qua Nether- 
lands, West Germany, Sweden 
and Finland. The accompanying 
table illustrates the relatively 
favourable position of British 
plants using 2SMW with a 60 per 
cent load factor. 

However, Mr Alan Marriott, 
technical director of the Paper 
and Board Industries Federa- 
tion, warns that any Increase 
will have a dramatic effect. A 
rise of 25 per cent spread over 
two years would raise manufac- 
turing costs fay as much as 5 per 
cent. For one British company 
with a Sto-a-year electricity 

bill, that means a cost increase 
of nearly £25m a year. 

For l ea di ng companies oper- 
ating in highly competitive in- 
ternational markets, such 


higher costs will hit their prof- 
its, dampen their investment 
plans and affect staffing levels. 

Fra the chemicals industry, 
the situation is even more dis- 
concerting for such key prod- 
ucts as chlorine, which require 
sr high electricity input and 
which are widely used by foe 
downstream manufacturers of 
important plastics such as PVC 
(polyvinyl chloride) and of tita- 
nium dioxide, the [rfpmw* n*wi 
in white paint. 

Mr Reg Legge of the Chemical 
Industries Association says the 
figures released by the Electric- 
ity Coun ci l and his association 
fail to reflect the extent to 
which chlorine manufacturers 
on foe Continent benefit from 
old-established "Special deals.' 

He cites the alleged 10-year 
contract under which Atochem, 
one of France's principal chlo- 
rine makers, pays only L3 pence 
per unit (kilowatt-hour), about 
half the most favourable price 
In Britain. In Wert Germany, it 
is said to be standard practice 
to offer "special terms" on the 
heavy industrial tariffs for 
plants in foe 10MW to 20HW 


In B ri tai n , price rises of about 

21 per cent would of&et some of 
foe advantages provided by con- 
cessions won in Britain in re- 
cent years, such as foe so-called 
Qoics scheme, which supplies 
cheaper power to big, energy* 
intensive sites, 

The scheme, linked to a cheap 
coal deal between . British Coal 
and foe Central Electricity Gen- 
erating. Board, has helped cut 
those customers* electricity 
bills fay an average 7 per ce&L 



e ®ch ) 


Financial Times Friday November 6 1087 


% s 


3 L : -z'ASi’ 

tl • 


• - !. I A 

* ;• “ - 



. If you have always envied colleagues who can perform amaring tricks with 
matchboxes and rubber bands (or, Heaven forbid, lost money and drinks to 
them), here is your chance to get ewa 
AH the papertricks on this page are as easy to master as nuking a paper 
plane — but all arc far more imp ress i ve. 

, With them, you win certainly be able to’ fool enough of the people lor 
enough of flic time to make a tidy profit... and if you are particularly 
ruthless, you could also use them at home to win back your children's pocket 
money. 


At a push, you could perform this feat with a whole 2p and a lp bole, but 
using grubby little coppers will hardly enhance your image as a thrusting, 
successful executive. 



mL. "■ :s:13!s 



filter n> 


Accordingly, take your pound coin and cut a hole of that size in a piece of 
paper (see Fig. la). Fbld the paper so that the hole appears to be a semi-dxde 
and rest the 50p piece in it 

Then ‘stretch’ the bole as shownin Figure lb —and the 50p coin will fell 
through quite easily . . 

. Business moral: hi any plan, or system, there is nodbink so small that you 
cannot lose money through it 

Z Stroll throug h row p ap erwork. ... 

"Raring a hole in an A4 sheet of paper big enough for you to walk through 
may appear impossible at fast— but in fact his remarkably easy to da 

First, find a sheet of papec (f£ you do not want to tear up a new one, use a 
page from the office newsletter — they never tell the rcalnews about the 
company anyway.) Then tear it as illustrated in Figure 2. 

It will cofy take a minute before walking through die paper is an absolute 
walkover. 



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Mr 1 / ^ <J 


WggSSg V vtf l;i I A, 

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4. A striptease 

The paper-tearing challenge looks far easier than the last, but in feet it is 


Tike a sheet of paper and make two preWnary teats as shown in Figure 4a, 

leaving abenit 5 mm still to be bHU breach case. Then invite anyoneto take the 

TV..-!' o u ter snips and tear them in opposite directions at 

^ *!■ the same time (see Rg 4b) so feat fee centre strip 

;VX*' ■■ ‘ V.v fells dear >-*; 


Mgs.- ^ 

gyut,. “, s . ■ j: jV;'"*.. s’* ■. ■ 

few*; r i'.v. : = 


SPkl 


After fee inevitable miserable Mure, you can take snide pleasure in 
revealing the simpBdty of the secret Make a diagonal cut bum the top of the 

extreme left-hand fine to fee bottom of the one on the fer right, Qy sliding fee 

top section diagonally upward to die position shown in Figure 7b, you arc 
left with nine fines, each just a little longer than the original ten. 


' \ Your accountant should also appreciate this trick, in which 64 is 

■■■}: mysteriously turned into 65. 

Draw a grid of 64 squares (as in Fig 8a). Then cut this into four sections 
(as in Fig 8b). By cunningly rearranging the pieces of paper (Fig. 8c) r you can 
make a 5x 15 rectangle (Fig 8d) — which of course contains 65 squares. 






I^HCU 


JFqpwefa ‘ 

Whoever tries this is bound to fail. Because the joins between the strips are 
never of exactly the same strength, only one will ever give way, leaving the 
other intact 

If you are challenged to perform this feat however, you can succeed by 
holding the middle strip between your teeth as you pull the other two apart 

5. Ajg perrpoqd, 

Can a piece of paper have only one side and one edge? \bur colleagues will 
doubtless say no (unless they have already seen this page, of course), but it is 
simple enough to demonstrate that it is possible. 




j^trfSb 


HT’BFT B ■ >l i, i. 

HgunSm 


RgartSb 





■ (Hg 5a) and giveit a half-twist . 
before joining fee two ends with a 

piece of sticky tape. You can then prove feat this loop bas only one side and 
edge by tracing a Hne around it with a pencil (Hg 5b). 

This topological phenomenon is known as a ‘Mobius Strip* after its 

inventor, the German 

mathematician August 

Ferdinand Strip. (Sony — 
Mobius.) 

UgartSd 


There is a further twist to 

this, thou^Llfyou cut along ' rfr ^ 

the centre of fee strip as shown ^ 

in Figure 5c, you do not end iq> with two loops of equal size as you mig^it have 

expected. Instead, you are 
left with one loop of twice 
fee size (Fig 5d). 

Yet something even 
loopier happens when you 
cut along the centre ofa*- 
stripwhkhh^beengvea 
xtZM ** — a full twist (Kg 5e). This 

time there are two loops 

^ — but astonishmgly, they 

are interiinkedl (FlgSft) 


JRsmreSa 

It seems impossible — and indeed it is, 
form fact the rectangle is not quite perfect 
There are some slight irregularities resulting 

from the cuts, whidi add — 

up to the area of one _1 i_ ■' , / 

square. However, the i 

pieces fit so closely that j • '* f 

most people wifi not r- — 
spot fens. — " j - , Ia — 

For obvious reasons, | 7 . ■ 

tl>« ill usio n Will alwn [• r. ■ 

appeal to any chess- 7~ ”7 ; • 

playere in your office — r~ - /■ j'Tt — 

but do not demonstrate - ■ i. ■ i- — 

it by cutting up their I L_|-— 

chess-board, or the 7: '■ ,t I ; 

would-be Kasparovs --/T-- -| 

will soon tdl you to 77“ ’T.«7 

Bogov (or worse). ^ ^ » 

fbm8c 



Bsme8d 


: < ’ ? I 


From Mobius strips, we move on to paper cl^ps and the problem of how to 
join two together without actually touching them at the feme. 

You will not be entirely surprised by now to learn that the solution lies in 
the use of yet another strip of papec. 

Simply attach the two paper dips to the strip as lOustcated in Figure 6 and 
pull the two ends in opposite directions. The K2s will fly up into the air — 
and on closer inspection wifi be found to be linked together; 




-T r 

... --i 

t ±' r .: r’ 

"" 


For this hide, you wifi need a £5 note, a lOp piece (to be provided by a-, 
colleague) and a glass. It is unwise to use a note of a higher denominatioii 
than £5 — for one thing your superiors may think that you are being paid 
too much (c£ our advice on coins in Section 1), and for another; your 
intended victim may just be tempted to perform a disappearing act with your 
money before you start 

'■* finite jour collrague to place the note owr the edge of the glass and to 
balance few coin flat xqxm it The problem now is how toremove the note, 
leaving the com stifi perched on fere glass rim— without tondiing either the 
glass or the coin. If successful, your workmate may keep A 

your firex— otherwise you win the ten pence. t « 

In all probability, your associate win simply attempt 
to snatch the note away quickly — and you will be lOp lKF\ 

richer. After a few more vain efibrts,o&r to demonstrate 
how it is draw wife a £5 note from your colleague. Pt'+iL 

Set up the note and coin as before, and lift the other E k £| 7 
end ot the note as shown in Figure 9. (Tip: it helps to XgJJjmbr 

place the coin in one comer of the fiver and to pOK 

bold fee comer diagonally opposite) W i 

By giving the centre of the note a sharp 
down^zoke with the forefinger of your free 
band, you should be aUe to whi^c it away iAfj? 

successfully. (Do not be disheartened if you /#/ 

foil at first, by fee way— this trick does % $i;w 

require a fitde practice to make it woric I 

perfectly every time.) rwi4j[| 


F [ j \ iii 













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14 


UK NEWS 


Financial Times Friday November 6 1987 


BNFL claims 
world lead at 
Sellafield plant 

BY IAN HAMILTON FAZEY, NORTHERN CORRESPONDENT 

BRITISH Nuclear Fuels yester- 
day presented its first public re- 


view of progress on its contro- 
versial £L65bn new 
reprocessing plant at Sellafield, 
Cambria, and claimed a world 
lead in developing new technol- 
ogy to make the plant work safe* 
ly. 

Sellafield's giant Thermal Ox- 
ide Reprocessing Plant (Thorp) 
is due to start work in five 
years. It will reprocess used fu- 
el rods from nuclear reactors, 
converting them into uranium 
for re-use, and also producing 
plutonium. Waste products will 
be made safe for storage 
through encapsulating them in 
molten glass. 

Thorp will be as tall as St 
Paul’s Cathedral in London but 
at least three times as big in 
length and volume. It is one of 
the biggest single engineering 
projects ever attempted, and al- 
most certainly the most compli- 
cated. It also promises to be im- 
mensely profitable 

Ur Bill Wilkinson, depaty 
chief executive of BNFL, said 
that the Thorp plant was al- 
ready 88 per cent booked for its 
first 10 years of operations, with 
£2L5bn of foreign orders, mainly 
from Japan, and £L6bu of or- 
ders from the Central Electrici- 
ty Generating Board. 

He said: "Thorp is BNFL’s fu- 
ture. The business it will get in 
its 25-year life will swamp all 
the other business BNFL will 
attract” 

Mr Wilkinson was addressing 
a seminar of the British Nucle- 
ar Forum, the trade association 
for the nuclear industry. Mem- 
bers include most of the leading 
names in heavy, civil and chem- 
ical engineering. 

The seminar included a tour 
of Thorp, part of which - a re- 
ception pond for storing incom- 
ing foe! rods - is already being 
commissioned. The plant will 
only reprocess fuel that has 
been left for five years to cool 
down thoroughly. About £508nx 
has been spent on Thorp so far 
and spending is running at 
about £600m a year, 90 per cent 
of it in the UK among hundreds 
of suppliers. 

The advances which, it is 



Bill WlUdnsonJooldng to ftature 

^iflinwd. make Thorp work safe- 
ly revolve around plant design 
and construction. They include: 

• Computer-aided design of pi- 
pework networks. 

• Numerically controlled 
bending of pipework in off-site 
workshops to fit the computer- 
aided design. 

• Automatic orbital welding 
techniques, some of which 
BNFL has bees able to patent, 
in spite of using US and French 
machines to do the jobs. It 
should therefore be able to 
earn royalties from licensing 
use of these processes. 

• The use of computer-linked 
later theodolytes to define the 
'co-ordinates of every corner of 
the plant after concrete has 
been poured. The data is fed 
back to the pipework design 
computer so that drawings can 
be adjusted to ensure that pipe- 
work bent into shape off-site fits 
when it arrives. 

What such advances do is en- 
sure that the pipework has as 
few bends and welds as possi- 
ble, and that none of it 'clashes.* 
Getting round clashes when 
building conventional chemical 
plant has usually involved 'cob- 
bling’ things together on site 
with unplanned extra bends to 
fit in extra lengths of pipe, ad- 
ding unscheduled welds In the 
process. Thorp will also be the 
most earthquake-resistant 
building in Britain. 


BCal plans 
alternatives 
to merger 
with BA 

By WchaeJ Donne, Aerospace 


BRITISH Caledonian Airways 
is poised to link with another 
European airline within the 
next few weeks, if the p roposed 
merger with British Airways is 
rejected by the Monopolies 
Commission. 

Sir Adam Thomson, chairman 
of the BCal group, said in Lon- 
don yesterday that over recent 
weeks, while the Commission 
has been studying the BA*BCal 
merger plan, BCal has been is 
discussion with at least 12 other 
airlines, with a view to one of 
them taking a significant invest- 
ment in BCal. 

The Monopolies Commission 
has now sent its report on the 
proposed BA-BCal merger to 
Lord Young, Secretary for 
Trade. The entire UK air trans- 
port industry is hoping for an 
early statement for or against 
the plan. 

While Sir Adam yesterday de- 
clined to disclose the names of 
airlines involved in talks with 
BCal, it is known that they in- 
clude Air Inter of France, Ali- 
talia of Italy, and Northwest of 
the US. In feet, there are few 
European airlines with which 
BCal has not been in touch. 

Sir Adam said the BCal board 
believed a complete take-over 
by BA was in the best long-term 
interests of BCal and the UK air 
transport industry. 

But if the Monopolies Com- 
mission rejects such a plan, or if 
any revised offer from BA is fi- 
nancially unacceptable, there 
was "more than one* European 
airline ready to move in. 

BCal’s contingency plans 
were far advanced, he said, and 
an alternative investment from 
another airline could be ar- 
ranged within a few weeks. 

Sir Adam was unable to say 
what the size of any such alter- 
native airline investment in 
BCal might be, but it would 
probably be not less than 15 per 
cent of the BCal share capital, 
and might be more. 

Sir Adam said that over the 
years ahead, there would be 
more airline mergers in West- 
ern Europe, but BCal would sur* 
vfve, either as part of an en- 
larged British Airways group or 
in partnership with another air- 
line. 


Nick Garnett on the likely move of plough manufacture abroad 

Lean times for farm machinery 


THE SALE, announced this 
week, of Ransomes Sims and 
Jefferies' fium machinery busi- 
ness to Electrolux will almost 

certainly result in the removal 
to Sweden of what is the UK’s 
second largest agricultural ma- 
chinery operation. 

Ipswich-based Ransomes wffl 
continue to ploughs and 
barrows - the core of the busi- 
ness - for the next two yearn It 
indicated yesterday, however, 
that the business would then be 
merged with Overum and TTvo, 
the Electrolux subsidiary which 
e xp o rts ploughs to the UK. The 
company could not say how 
many jobs would be affected. 

The Electrolux purchase is 
the latest development in a line 
of ownership changes in a UK 
industry accustomed to seeing 
its members jostle for position 
in the market, often by acquisi- 
tion. 

Last mouth, for example, 
Bomford and Evershed, a mann- 
focturer of hedge trimmers, eut 

tivatillg mantling inH white . 

nance equipment was taken 
over by the Elswicfc group 
which uroducea a similar range 
of products. 

The sale of Ransomes to Elec- 
trolux is unusual because pro- 
duction capacity - ■"■’rnriing the 
only plough making facility 
apart from that of Warwick- 
shire-based Dowdeswell 
seems destined to be moved out 
of the UK, though Electrolux 
could not confirm this yester- 
day. 

What has usually happened in 
this sector is that the sale of 
companies or the collapse of 
pflmputing h miTWMt eannHn In 


plant rationalisation but prod- 
uct lines tend to live on in the 
bands of other UK producers 

ready to buy them. 

Agricultural equipment has 
two distinct sectors. Tractor 
inaHwg in the UK is in the 
hands of the big three North 
American producers, Ford, 
Massey-Ferguson and Case, to-, 
aether with two British manu- 
factarera. County and Marshall. 

By contrast, machinery mak- 
ing from ploughs and drills to 
f yriai irrigation e q uipment, is 
an ants' nest of an industry with 

some 300 companies, half iff 
them employing 20 or fewer. 

Total employment in the ma- 
chinery sector, excluding trac- 
tors, is about 2&J0QQ and the UK 
is probably the fourth largest 
European machinery maker af- 
ter West Germany, Italy and 
France. 

The past two years have seen 
a continuation of the ownership 
wnfcii ffltng tent has always 
characterised the industry. 

Last year, when the UK ma- 
chinery market tumbled by 18 
per cent in unit sales, a number 
of companies went into receiv- 


In 1967, with the market down 
but not to the same degree, the 
industry has witnessed several 
management buyouts as well as 
agreed company purchases. 

This year, Hestair, the indus- 
trial holding group, got out of 
the industry. One iff its princi- 
pal businesses, Stanhay-Webb, 
a seed-drill maker, was bought 
by its management 
Wright-Rain, a Hampshire- 
based wmh»r of irrigation 
equipment was also subject to a 
management buyout ai 


Javelin Irrigation, which makes 
similar products. 

Last year, the Wolseley group, 
which has seven farm machin- 
ery businesses employing 14.00 
le around the country, con- 
Its position es the big- 
lucer in the UK by pur- 
lines from a number of 
companies. 

It took the pneumatic fertilis- 
er spreaders and planting 
equipment from the Yorkshire- 
based AC Bamlett group which 
bad gone into receivership. It 
also bought the co n ventional 
drill range made by Bettinson, 
another part of the business 
sold by Hestair. 

The resilience of product 
ranges in this very competit i ve 
sector was demonstrated by the 
industry's two big bilnzes since 
the from of the decade. 

Many of the products made by 
Howard Machinery, which in- 
vented the r ota v ato r and went 
into liquidation in the early 
1980s, are now made by other 
UK companies. 

At the same trine the trailers 
made by Weeks, the UK market 
leader in trailers when it went 
into voluntary liquidation three 
years ago. wens bought ui 


^osures,bstlhopethisisiiear- 
inganend/ 

The association says Out ex- 
change. rates .and labour im- 
provements have helped to 
nude many British companies 


highlyproductive and competi- 
tive. 'You are now seeing 


which now makes them under 
its own name. 

"We have reduced capacity 
through acquisition and ration- 
alisation but tiie range of ma- 
chinery we make has not shrank 
much at all,' says Mr John 
Young; president of the Agricul- 
tural Engineen Association. 

*Wa are leaner but there Is 
still some overcapacity and 
there will be farther capacity 


_ a lot 

iff ple asur e on importers,” says 

one machinery builder. 

As an indication of that, per- 
haps, British and General Tube, 
importers of Boner irrigation 
equipment, went into rece i ver- 
th ip this year. 

The UK though is not the 
force it once was in agricultural 
machinery. It suffers from hav- 
ing a much smaller domestic 
market its niin ^ Ti European 
competitors, partly because of 
the relatively Luge size of its 
farms compared with those on 
the Contineut 

In the past 10 years, the total 
mtrfrt for nwM-fafiuwy 
has shrunk by 40 per cent in 

But UK producers have not al- 
ways boon In a position to satis- 
fy the market When Britain 
joined tike EG, domestic de- 
mand rocketed and British ma- 
chinery makers could not cope 
with the rush of orders. Imports 
rolled in. 

The closure of Kassey-Fergu- 
son's xiiwmftpk plant tm Scot- 
land in tiie 1970s also took 
o at wf w w iM f ii? harv e st - 


Haitian tractors, which make 
mors than £200m contribution 


to the balance of payments, the 
UK Is a net importer of Aim 
machinery- The Electrolux deal 
looks as if It might eventually 
worsen that deficit 


Cheap US air fare plan 


BVLYNTOMHeLAM 

HIGHLAND EXPRESS Airways 
wants to introduce a £99 single 
fere between S toasted or Bir- 
inghsm. via Prestwick; Scot- 
land, and Newark, New Jersey, 
which serves New York. 

The has applied to tiie 

Civil Aviation Authority for per- 
mission to offer the fere for the 
winter as pari of its strategy "to 
bring low-cost scheduled ser- 
vices to the Midlands and East 
Anglia," Hi ghland Express said 
yesterday. 

The proposed Are compares 
with the airline’s current mid- 
week single economy Are of 


£109 and its weekend single 
ec on omy Are of £189L 

The airline's one Boeing 747 
flies from Stanstod and Bir- 
mingham on separate services 
to Prestwick 

Highland Express was flamed 
by Mr Randolph Fields, the 
founder of British Atlantic Air- 
ways, which became Virgin At- 
lantic Airways. 

It started passenger services 
b etween Scotland and New 
York in June last year, with the 
first feres also at £99 for a single 
economy ticket 


Far East deal for Inmos 


BY TERRY DOQSWORTH 

INMOS, the UK semiconductor 
group owned by Thocn EMI, is 
stepping up its expansion in the 
Far East with the appointment 
ofa distributor in Hong Kong. 

The agreement comes during 
a year of rated growth for the 
company, which Is benefiting 
from the use of one of its chips 
for colour graphics in the IBM 
PS/2 personal computer. 

Many Japanese companies 
are also evaluating Inman's 
product line, particularly the 
unique tr a nsputer chip, a mi- 


croprocessor th n * operates at 
highspeed*. 


Inmos established its 
ence in the Far East 
■ales office opened in Japan 
about a year ago. Since then, it 
has developed that part of its 
to about 5 per cent of 
Its current turnover of about 
£60m a year, and its move into 

TTn ng Xwig mwtertimx itmnhl. 

trims to expand throughout the 
region, not only in Japan. 

Inmos 1 ! growth has estab- 
lished the co m p an y as one of 
the three largest integrated-cte- 
cuit manufacturers in thfr UK, 
with Plessoy and Ferranti. 



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toCTUfreQhtaaawnptt 



Joint fighter decision nearer 


THE MINISTRY of Defence to- 
day start s the decMon-msblng 
nrnr riw t 1 *** ffi rii iw iM w wM 
lead to s firm commitment by 
testate to spend as nth as 
£4bn as its shore of developing 
the European Fighter Aircraft 
(EFA) with West Germany, Italy 
Spain. 

The ministry's E qui p m ent 
Policy Committee CEPCJwillto- 
day review whether Britain 
■should enter into full-scale de- 
velopment of EFA. Its likely ap- 
proval will then be considered 
first by MoD ministers. Other 
'departments will be consulted 
In Cabinet. 

Uncertainly still hangs over 
the four nation s'^ coDa hor atlve 

their air forces, because of 
growing nervousness, particu- 
larly in Wait Germany, that the 
EFA project will prove fer more 
expensive than buying a US 
fighter like the F-18 off the 
shelf 

Mr Manfred Woeznez, the Ger- 
man defence minister, who 
feres a competing demand on 
Us budget from an ambitious 
Franco-German helicopter 
project, used a Note meeting In 
California this week to seek as- 
surances front his British, Ital- 


ian *nd Spanish ministerial 
co u nt e rparts flat they were 
■till behind the project. . . 

Mr George Younger, the UK 
defenc e . se cret a ry, said after- 
wards that tite Gorthons had got 
the assurances and that he was 
confident all four gov ernmen t s, 
via their different national pro- 
cedures. would be ready to give 
the go-ahead for foil EFA devel- 
opment eariy next yean 

If Bonn were to drop out, the 
EFA project would probably 
collapse. Us participation was 
vital to the making or the Torna- 
do fighter with Britain and Ita- 
ly. like Britain It is doe to bear 
a third of development costs 
and trice a thi rd, o r about 290 
aircraft, iff production. 

British have not di- 

vulged latest development cost 
estimates But the Germans 
hove put their share, identical 
to Britain's, at more than DMs 7 
bn (glhaj), nearly twice the es- 
timate two yean ago, although 
German figures include value 
added tax extended in UK esti- 


despexately searching for part- 
ner co untries on its' Rafele 
tighter pr oject , which it might 
well fi nd if EFA were grounded. 

The ETC, chaired by Profes- 
sor Richard Norman, the MoD 
chief scientific adv is e r, will ex- 
amine, pro forma, two alterna- 
tives to EFA - a purely national 
British Ai 


F rance dropped out o f EFA 

toit^nMtgebecaiue^vmited 
a lighter jet for expert and for 
use on navy carrion titan the 
other four countries. R is now 


by British Aerospace 
known as P120 and purchase of 
an updated version of 
McPonnell-Pooglaa F-18. But 
the MbD is set against solo UK 
development ofa fighter, while 
UK Industry would rebel at a 
straight import. - 

Much of the cost Inflation for 
EFA arises from fira radar. Two 
co ns ortia have bid to supply tiie 
radar; one ce ntred on new tech- 

SS ( ofS*UK«oS^e^^S 

offering a modernised version 
of radar from Hughes of fim US 
a lready In aircraft Bke the F-* 

West Ger ma ny wou l d be much 
happier about EFA ff it were to 
have s common radar with the 
German afar force's Phantoms. 
Kit the UK Government mow 
prefer the F mauti radar, with 
a UK company taking the devel- 
opment lead. 

Adstfght 


Temple of 
cash draws 
the true 
believers 

KJj reCnVu YvCZSfl 

WORSHIPPERS at (he temple 
of money yesterday did not 
seem to think tkeir god had 
de s erted t hem - 
Like true zealots, they retain 
(heir fcHh in a wnn in f f iit di- 
vinity, although the edge iff 
their religious mania may 
have been blunted slightly by 
■in mil minis 

Mr Stonlej East; a retired 
nightclub owner from Lancing 
In Susses; and his wife Joyce 
wane among those making the 
pilgrimage to West London to 
demonstrate their Aith. The 
occasion: the first day of the 
M on e y *87 Show to Olympia. 

Mr «ml Mm TffMt, if 
an stfiD prepared to lose all - 
the only mark of tin rail be- 
liever. *We wont be destitute If 
we bn the lot,' said Mr East 

cheerfeUy. 

The lot* in question Is a tidy 
fifth- £3*980, made when the 
Easts soU their nightclub in 
Sbozeham, Snsaex, last year. 
Having kept their money qui- 
etly in a building society earn- 
ing Interest at l»Vfc per cent for 
a year, the Easts have now 
cone to London to find mine 
exciting things to da with ft 
- JsMghig by the austere ex- 
pressions on the feces of seme 
of those at the show, they may 
he glad timy dld not find some- 
thing more exciting to do with 

It earlier. 

Mrs Violet King, from Read- 
ing, rise says life would not 
change too much if she and her 
husband Edward last their 
not egg. 

He retired as a fire safety of- 
ficer two years ago. He has an 
a mrai l y , a pension and some- 
thing pat a^dc in the building 
society. 11m rest has hero ven- 
tured in unit trusts and stocks 
and shares - with varying de- 

"We*ve lost abort £11,000 or 
said Mr King without 
( his bottom lip quiver 
On the eve of the stock 
* crash, bo redoms the 
wing family interest in equi- 
ties to have been £49^)09. 

B oth the Kfn^ and the Easts 
■ay. money Is. a hobby. The 
Baste ga te evening classes In 
it. Mr King has bought a Sin- 
clair computer so he can keep 
track of what is happening to 
Ua. Both read the Saturday FT. 

Coming to the Mecca of mon- 
ey, then, there Is one thing that 
may writ have puzzled them: 
there was no sign of the stuff. 
The stands of fawrfniwd 

houses and advisers alike, fal- 
lowing shaoal universal mini- 
malist designs, eschewed any 
hint of cash. No one was visibly 
investing Ui and no one was 
giving any away. Only Abbey 
Life had the appare n t had taste 
to offer passers hy the chance 
to vria £560 by sticking a pin in 
a map. 

In Act there was only one 
place wherq hard cash np- 
peared to be c h a nging hands. 
The proprietors of the Windsor 
Bar, in the hall at Olympia, 
could certainly teach the mon- 
ey men a thing or two about se- 
parating the punters from 
th ei r c ha nge. 


Cashless shopping 
trial hy Girobank 

ByHupoDfron 

GIROBANK Is launching a cash- 
* shopping trial In two super- 
hate ran by J Salisbury, the 

Aod retailer, later this yen 

Girobank is a wwiihH of the 
LINK cash network and emtom- 
ere of UNKi other members 
will also he able to use the 


Ob Ok Holden of 
Floating Sate Notes of 

CYDSA.SA. 

Doe 1968-1981: 

PLEASE TAKE NOTICE. Oat 
Baaco da Maries baa imed an 

opinion atatrog that the Floating 

Bata Note* of CYUSA, SA. la 
the principal anwant of UA 
tsa000.000.0a ha d pra a m 
to a TVmt lud c una e dated at of 
Octebart&ISSlbetoaenCYDSA. 
AA and The' Rend Bank aad 
That Company aa Thntae, aa 
amended hy Fbic finpfrtanuntil 
tidwnnw dori aaof Febroaryfi. 


taas anfajete to the tents at the 
FICOECA Facilitr Asrmmaot 
dated awfAocaat 14. Wg among 
Baace dcMafco aa 7hntee far 
PfCOBCA. the Uaind Mexican 
State*. Banco <le Koloo aa tit* 
central bank of the United 
Uedcte Statea. cartels banks 
naxaed (barmo. B a nco KacWBtl 
de Meiita. SLN.C, a* j rri cim g 
bank aad Bankers Than Cantpaiv 
aa Asent tar the baaka ebacb am 
partis thereto. 

AtttetSacfe A* bdabCed. 
ouwvfCYPM. SAeridoamd 

by aud Floating; Bate Notea b 
exempt Cm the pntcrdumaet 
forth *o A* anal FaefAy Agrm- 
anat aad fee R ai t racs wmg 

tedablkhad thereby, and arid 
Ftoatiag EM* Kowe sad arid 

Indenture, as amended by said 
Pint Sap ph eniHter Indenture. 
r timte oa ft eetoMeoioeeagdmc«! 


The Royal Bank and 
That Company, 
asShate 




rzF?. 


Our new management: structure 
supports our partners. And our 
partners service our clients . 




Chesterton 

IS CHANGING. 

At regional national and 
htsBriaMlI mk ChfwtDff bftst . 
beaming onooftflomortilg nWan f . 
a mm erdal property networks. 

Irtd rtw ga H Hrfdhiqhg 
waricctt demand not 

Jterina ISnniaf|pniatioR*l qstaaL 
O a it o to n h*KJw*txd*n*wirmwga jMi t 
sXnxturt thtipte ^ dm sufipottfortnmy. 
partner tntUkiglhBM in focus their 
spacUBapmtmoion$ltkSsixneBent- 

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andmtgfag'4t0mtmlQn r tart* 

Chesterton 

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Financial Times Friday- November 6 1987 


Full Steam 


On A Steady 
Course 


In thel9tti century 
Degussa 

originally a family run precious metals 
reftiing and chemicals manufacturing 
business, emerged as a publicly quoted 
metals and chemicals company. 

In the 20th century 

grew into an internationally renowned 
metals, chemicals and pharmaceuticals 
concern, with a turnover of 12 billion 
D-Mark and aver 30000 employees 
with plants and operations in Europe, 
North and South America and Asia. 


Degussa 

by increasing expenditure for research, 
investment and acquisitions, 
is preparing itself for the 21st century. 


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«*»»*-.=*** " 

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lit- It U rmjjv 
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Degussa AG P.O. Bax 110533 


fr-6000 Frankfurt T1 







Financial Times Friday November* 1387 


UK NEWS - PARLIAMENT and POLITICS 


■r '• J 


Smith jibe rouses angry Lawson response 


Package to 
cut deficit 


BY TOM LYNCH AND IVOR OWEN 


HOSTILITY between Hr Nigel 
Lawson, the Chancellor, and Mr 
John Smith, his Labour shadow, 
erupted into an angry row in the 
House of Commons yesterday 
during a debate on the collapse 
in the financial markets. 

Sir Pan! Dean, the deputy 
Speaker, had to intervene to re- 
store order after an increasing- 
ly furious Mr Lawson, backed by 
Tory roars of anger, rose six 
times during Mr Smith’s speech 
to deny that a sentence in his 
Mansion House speech on 
Wednesday night had been an 
insult to Mr Karl Otto Poe hi, the 
president of the Bundesbank, 
the central bank of West Ger- 
many. 

Mr Smith quoted Mr Lawson 
describing as 'manifest poppy- 
cock* the view that exchange 
rate stability promoted stock 
market instability with the cor- 
ollary that exchange rate stabil- 
ity would promote stock market 
stability. 

Challenged by Mr Lawson to 
produce a quote proving that Mr 
Poehl held such a view, Mr 
Smith, to Tory derision, re- 
ferred to "leading economic 
commentators.' He told the 
Chancellor; "You know you 
were attacking that view - yon 
know where it comes from.' 

Mr Lawson said Mr Smith had 
made a serious allegation about 
Mr PoehL "You have produced 
not a shred of evidence that it is 
his view. You must withdraw." 

Expressing surprise at having 
"touched such a sensitive spot," 
Mr Smith stood his ground, 
backed by a growing chorus of 
approval from Labour MPs, ob- 
viously surprised at such a ma- 
jor raw developing on the point 
and revelling in the anger of the 
Chancellor and his supporters. 



A remark hy John Smith deft) spaded a leguthy exchange with an angry Nigel Lawwa 


Mr Lawson said his remarks 
were aimed at some economists 
employed by City stockbrokers, 
at which Mr Smith retorted that 
he must then have been attack- 
ing some of the people he set 
out in his speech to praise for 
their calm in the face of the cri- 
sis. 

At the heart of the debate was 
the timing of any international 
inttative. Mr Smith argued that 
the major economies should 
meet immediately to draw up a 
comprehensive programme for 
action, while Mr Lawson in- 
sisted that to do so before the 
US Congress and Administra- 
tion had agreed on a package to 
cut the budget deficit would 
have a "devastating* effect* on 
world markets. 

Mr Smith urged the Govern- 


ment to take a lead in getting 
the Group of Seven major econ- 
omies together to 'engineer an 
accord to save us from disaster. 
That would do more than any 
single thing to restore confi- 
dence.' 

The accord should cover in- 
terest rates and managing ex- 
change rates, and should co-or- 
dinate expansion in Western 
Europe and Japan so that, if de- 
flation resulted in the US from 
a cut in its budget deficit, the 

in COtlld be 

up by the other industrial econ- 
omies. 

"It is vitally necessary that 
there is an international re- 
sponse which involves govern- 
ments. The shattered markets 
are looking to governments to 
play their indispensable role in 


the world economy/ 

Mr Smith said it was "vitally 
important* for the UK sot to 
wait until the negotiations with- 
in the US had been concluded 
before adopting its own strate- 
gy. He argued for a targeted in- 
crease in public expenditure on 
the infrastructure, which was 
desirable in itself and would 
help ofiket any decline in de- 
mand from across the Atlantic 

There would be "nothing more 
irresponsible” than to use avail- 
able resources for income tax 
cuts, which would suck in im- 
ports and worsen the balance of 
trade deficit 

Mr Lawson insisted that the 
Government wanted to see an 
intornutiiwMi agreement "but 
the first step in any agreement 
has to be the securing of agree- 



Speaker orders Skinner out 


BY TOM LYNCH 


:J:V • ■ 

4 




W * 

Sit! j 



Dennis Skinner: accusation 
* — Tebbit 


MS DENNIS SKINNER, the 
Labour MP for Bolsover, was 
yesterday ordered by Mr Ber- 
nard Weatfaerill, the Spanker, 
to leave the Gammons chamber 
after accusing Hr Norman 
Tebbit, the farmer Conserva- 
tive Party rh»irtmaii, of lining 
his pocket*-" 

During business questions, 
Mr Skinner referred to Mr Teb- 
bit’s successful apposition to 
Lord Young adding the party 
chairmanship to his current 
post as Trade and Industry 
Secretary because af potential 


PROPERTY TO RENT 


conflicts of interest in respect 
of companies which helped fi- 
nance the party. 

"Now at the same time the 
ex-chairman of the Tory Party 
Is not bothered about conflicts 
of interest when be is lining 
Ms own pockets.' 

Mr Skinner did not specify a 
co mpa ny, hot Mr Joe Ashton 
(Lab, Bassedsw) told MPS that 
Mr Tebbit, as Trade and Indus- 
try Secretory, had been respon- 
sible for doubling the salaries 
of British Telecom directors in 
the rnn-np to privatisation and 
was now Joining them direc- 
tors on the BT board. 

Mr Weatherffl told Mr Skin- 
ner his re fere nce to Mr TehMt 
was a reflection on the Ching- 


ford HP's honour, and demand- 
ed be withdraw IL Mr Sktnuer 
continued that be had made a 
ito mat reflecting on his 
honour and refused to with- 
draw because It is absolutely 


When asked to leave the 
Chamber, Mr SMnner at lint 
remained In his place bat 
eventually left, followed by 
about 28 MPs from the Labour 
left - about half of these who 
were in the at the 

t im » goad including Mr Tony 
Bern, MP for Chesterfield. 

After an argument with a 
Commons official and an ap- 
peal to the Chair, Mr Skinner 
was allowed to stay within the 
Commons precincts. 


From 26th October - 
Classified Rentals will appear 

every Monday 

For details of how to advertise please contact 

Clive Booth 

Telephone: 01-248 5284 
Fax: 01-248 4601 


Opposing factions in 
fresh row on merger 


BY MCHAEL CASSELL. POLITICAL COVMBPONDENT 








• •- .' ‘i:.- 


- '• ■b ■ " ,■ , -ji 

^ • .*■ ;*. / : :/ .* 

• .7- I - * v is 'ii. *: 


On and after 
5th November, 1987 
Standard Chartered 
Bank’s Base Rate for 
lending is being 
decreased from 
9.50% to 9.00% 


Standard Chartered Bank 

Head Office38 Bishopsgate, London EC2N 4DE 
TeL 01-280 7500 Tetex 885951 


RELATIONSHIPS between the 
pro and anti-merger factions 
within tiie Social Democratic 
Party leadership have plumbed 
new depths with the disclosure 
of a letter claimed by those ne- 
gotiating to create a new party 
with the liberals to provide 
hard evidence that their oppo- 
nents are paganising a "party 
within a party*. ' 

The letter has been written by 
Ms Marina Carr, an official of 
the Campaign for Social Democ- 
racy, whicl^ wants the SDP to 
continue as an independent po- 
litical force, to the party's area 
organisers. It calls on those op- 
posed to merger to "wrap" them- 
selves in tiie party machinery 
and to get as many people as 
possible elected to committees, 
councils and area executives so 
that they can cany on "when tiie 
split comes”. 

It advises supporters to "use 
their judgment' in assessing 
how best to spread their influ- 
ence and sugg e sts, for example, 
that it would not help to stand 
on a pro-SDP ticket in a largely 
pro-merger area. It adds: "Being 
sceptical about the terms of a 
merger could encourage people 
to believe theat they will be 
safe with your decision." 

The letter says that activists 
should not proceed under a 
mantle of secrecy but it then 
goes on to advise its recipients 


people to canvass their views. 

The tactics of the Owenite 
wing of the party have already 


infuriated those within the par- 
ty leadership who are conduct- 


ing the merger talks with the 
Liberals- Mr Richard Newby,' 
the party's national secretary,, 
said yesterday he was writing to , 
area parties pointing out that 
candidates were bound to state 
their true views in order to try 
to get elected and that, beyond 


He added: ”1 have felt the 
need to alert the party to possi- 
ble individual attempts by can- 
didates to deceive voters in lo- 
cal party elections*. 

There have been threats that 
members of the anti-merger 
camp could be expelled but the 
SDP leadership considers such 
a move, which might entail re- 
moving nearly half of the party’s 
national committee, would 
prove politically impossible. 
The hope is that what they re- 
gard as an increas i ngly blatant 
attempt to undermine the nego- 
tiations will prove counter-pro- 
ductive. 


Whitelaw views shunned 


BYWOROW0I 




DOUBTS expressed by Viscount 
Whitelaw, Leader of the Lords, 
about the Government's capaci- 
ty to carry into law its proposals 
to allow schools to opt out of 
control by local education au- 
thorities were brushed aside by 
Mrs Margaret Thatcher, the 
Prime Minister, in the Com- 
mons yesterday. She said: "The 
Government's opt-out propos- 
als, I believe, will go through 


and become law." 

Speaking on BBC radio last 
night - in a programme record- 
ed before the Prime Minister 
expressed her view - Lord Whi- 
telaw suggested that with so 
many peers having specialist 
knowledge of education issues, 
the opt-out provisions in the 
Government's bill to reform ed- 
ucation were unlikely to sur- 
vive. 


Electricity rise defended 


The Gateway BuikSng Society WathBTg,VVBst Sussex 

wishes it to be known that 660oflhe Society's cheques 
were in a safe which was stolen from its office iri WtaUase* 
Merseyside on the night of 3rcV4th November 1987. 

The cheques are drawn on Mkfiand Bank PLC, 

1 Warwick Street Worthing in the number ranges 
360541 to 360600 or 545401 to 546000. 

These cheques may be fraudidently completed and 
exchanged for goods and services by persons with 
criminal intent Such ftxged instruments have no vaue 
and flieSoctetycavwt be held Cabte on these cheques. 
Any person{s) having sight of one or more of fliese 
cheques should immedfatety contact their local 
police station. 

Gateway Btdkflng Society 

PO Boot 18, Wforthfig, Wfest Sussex. 


BY IVOR OWEN 


BRITISH industry will still be 
in a position to compete with 
overseas rivals when the in- 
creases in electricity prices an- 
nounced this week take effect, 
Mr s Margaret Thatcher, the 
Prime Minister, claimed in the 
Commons yesterday. 

Hr Dadd Med, the liberal 
leader, stressed that the higher 
electricity prices - they will rise 


by around 15 per cent in the two 
year s fro m April 1988 - would 
add £900m to industry's costs. 

The Prime Minister repeated 
that the higher charges were ne- 
cessary to pay for increased in- 
vestment When they took effect 
British companies would, in 
many cases, still be enjoying 
lower electricity charges than 
their overseas competitors. 


Parliamentary business 


MONO AY: Licensing BUI (sec- 
ond reading). Motion on EC doc- 
ument relating to free food 
scheme. 


meat inside the US on a credi- 
ble and sufficient package of 
measures to attack their budget 
deficit and bring it down in or- 
der to recreate market confi- 
dence.” 

However, he told Mr Smith: 
"To have a meeting now. when 
♦hat is not in place, would have 
a devastating effect on world 
markets and therefore it would 
be necessary to proceed on a 
proper step-by-step approach 
with the Americans reaching 
their agreement first' 

A meeting of the G7 would 
build on the US package and 
should include mone tary m ea- 
sures »wd action to improve the 
economies of individual coun- 
tries. Action on interest rates 
would be "a distinct possibility.' 

When Mr NeU Kfrmock, the 
Labour leader, intervened to 
state that be had instated on the 
necessity of government in- 
volvement. rather than relying 
on markets, but had not ap- 
proved of the scale or purpose 
of US spending, Mr Lawson told 
him: "You are wriggling and 
making it up as you go along.” 

The Chancellor insisted that 
it was a tribute to the str e ngth 
of the British economy, fostered 
by the Conservatives, that it was 
able to cope so well with the 
current crisis in the markets. 
His Budget next March would 
take the slump in. the markets 
"fully into account* 

Mr Robot Madesnaa, leader 
of the Social Democrats, agreed 
with the Chancellor that to hold 
a conference of the major in- 
dustrial nations without the 
ground being properly pre- 
pared and in advance of the 
United States taking action to 
deal with its fiscal and current 
account deficits wobld probably 
be 'disastrous*. 


Honours are even 
as the economic 


to US ‘Vital heayies battle 


first step’ 


By Ivor Owen 





Tony Beane left 

patfcy 


A CONVINCING package to re- 
duce the United States budget 
deficit most be the "vital first 
step towards restoring confi- 
dence in financial markets,” 
Mrs Margaret Thatcher, the 
Prime Minister, stressed in the 
Commons yesterday. 

Echoing earlier comments by 
Mr Nigel Lawson, the Chancel- 
lor of the Exchequer, express- 
ing the hope that the negotia- 
tions taking place between 
President Reagan and the Con- 
gress would soon be suecessftil 
Mrs Thatcher said: *T have been 
in touch directly with the presi- 
dent about it” 

Mrs Thatcher, who repeatedly 
praised Mr Lawson for his. suc- 
cessful management of the na- 
tion's finances, also compli- 
mented most small investors for 
refusing to panic daring the re- 
cent market upheavals. 

She said most small investors 
invested for the long term. 
When they purchased shares in 
a company they kept faith in it 
and took the dividends. They 
had been "very, very steady dur- 
ing the recent problems on the 

np .* 

Responding to Labour criti- 
cism of the Gov e r nme nts fail- 
ure to provide adequate funds 
for the National Health Service, 
Mrs Thatcher emphasised that 
the Chancellor's success had 
led to the growth in the econo- 
my which had enabled the Gov- 
ernment to spend more on 
health provision than its La- 
bour predecessor, amounting to 
an increase of 30 per cent in re- 
al terms. 

Mi rirfl ITIii— i k the Labour 
leader, argued that government 
policies had resulted in health 
authorities throughout the 
country having to impose cuts in 
order not to run out of money 
before the end of the financial 
year. 

He contended in effect, 
the Prime Minister was telling 
them: *Do not treat too many pa- 
tients in case your money runs 
oaf* and, by the same token, say- 
ing to patients. Try not to be ill 
at the wrong time in the finan- 
cial year". 

To government cheers. Mrs 
Thatcher stressed that £2&5bn 
would be spent on the health 
service in the current financial 
year compared with £8bn when 
she became Prime Minister 


AFFAIRS of honour provided 
the dominant theme in the Com- 
mons yesterday on a day when 
the stormy proceedings in the 
Chamber seemed to match the 
turbulence of the world stock 

An ffi-csorted range of per- 
sonalities came under attack in- 
chiding Norman Tebbit, Conner 
«•»!«> fry-man of the Conservative 
Party, Nigel Lawson, our pugna- 
cious Chan cellor, and even Ksrl 
Otto Poehl, president of the 
West German Bundesbank. It 
really was very bewfidering- - 

The trouble started when 
Dennis Skinner, that battle- 
scarred veteran of the Labour 
benches, launched an onslaught 
on Mr Tebbit, who is taking up 
several directorships including 


_ non-executive post on the 
board of British Telecom. 

Skinner complained there 
had been protests about a con- 
flict of interest over the possi- 
bility of Lord Young, the Trade 
and Industry Secretary, becom- 
ing Tory chairman. Bat at the 
same tim e Mr Tebbit had not 
been bothered about the con- 
flict of interest when he was 
"lining his own pockets.' 

That, ruled Bernard Weather- 
ill, the Speaker, was a reflec- 
tion onthe honour of an honour- 
able member and Mr Skinner 
most withdraw. 

"No, I can’t” retorted the Beast 
of -Bolsover. "No, no, it's abso- 
lutely true." 

"Shove oft. chuck him out", 
roared indignant Tories. 

Which is what the Speaker 
proceeded to da Yet again 
Skinner had been given the or- 
der of the boot and, as he 
stalked out of the Chamber, a 
group of leftwingers w e n t with 
him m a show of solidarity. 


have come to look upon him asa 
sort of political rhino trampling 
down ail opposition. Not at *IL 
Yesterday he emerged at a sen- 
sitive creature, who cringes «i 
the slightest insult 
Mr Smith, probably, fed up 
with getting the rough edge of 
the Chancellor's tongue, decid- 
ed to reply in kind. He pon- 
dered on the wording of Mn 
Thatcher’s message to Presi- 
dent Reagan following Mr Law- 
son'* Mansion House sp eech 
He surmised that the Prime 
Minister probably said: "Don’t 
take this chap too seriously. 
He’s rude by nature but he can't 
help it. X am still your friend. 
Signed, Maggie.” 

Nigel stayed impassive 
throughout this passage but be- 



came very perturbed when Mr 
Smith alleged that be had of- 
fered a calculated insult to the 
President of the Bundesbank. 
With great dignity he denied 
any such insult and 'called on 
Mr Smith to quote the alleged 
remark or withdraw his accusa- 


This was rather a pity as they 
were just the sort of political 


guerrilla fighters who would 
have been very mueh at home in 
the stirring events of the eco- 
nomic debate that followed. 

This turned out to be one of 
the most shambolic affairs of re- 
cent years. Most of the time 
seemed taken up by rowdy in- 
terventions as Chancellor Law- 
sou »nii John Smith, Labour's 
shadow Chancellor, stumbled 
throu gh tM r speeches against 
a barrage of heckling from their 
opponents. 

But at least we made one re- 
markable discovery. Nigel is 
not the parliamentary pachy- 
derm that we supposed. We 


tion. 

Mr Smith obliged by quoting a 
rather obscure passage In the 
speech in which the Chancellor 
had said it was "manifest poppy- 
cock” to claim that exchange 
rate stability promoted stock- 
market instability and that ex- 
change rate instablity promoted 
stock market stability- Although 
this was rather incomprehensi- 
ble to the rest oT us the Labour 
spbkeman set great significance 
fay It and thought it was obvious- 
ly aimed at Mr Poehl 

Repeatedly a fulminating Ni- 
gel rose to the despatch box but 
Mr Smith still stood by his alle- 
gation. *1 had no idea I would 
touch such a sanative spot," he 
declared gleefully enjoying the 
Chancellor's discomfort. 

As far as one could judge 
through tiie dust of combat tum- 
ours woe about even as the 
contestants staggered from the 


John Hunt 






Company Notices 


[LONDON eWNCHESlEB UVEHFOOL BRISTOL 1 


014348454 


RAND MINES LIMITED 


not to leave lists of supporters’ 
names lying around, not to carry 
the letter with them and to be 
cautious when approaching 


We have substantial clients 
seeking to acquire 

(i) Property Companies 

(ii) Property Portfolios 
£75,000 to £1,000,000 

Replies hi strictest confidence to M. J. Canntfbrd. ARICS 


ffonntrtr TbwS rnninlMilid Uni aad WwH CBm»my ttetaad Cm."» 
OncorparaMd hi te BttaMcaf SMS Africa) 

MndM No. aUOOGflMM 


lOlil 

RAND MINES 


x 

. • v* ?. 


; of nut wiuun to scran 


L BgMs after uftfcareo to Si 
to# rate if 111 Mwk 


an i > M—Uwisr i «e ia "iiiiwwii »w*« ih 

■tamfRim IHOmMI Ib Rand Wm LWW 
t adrertbed te tot IMS so Utb October 19S7 tahfen of Aon 



a) Holden wte •’frh te taka up tMr rights stadd smneeder mm Hoi 97, together vriib 4 My 
ura pte rd orengc Bating form thi dmBme) aad a tartan draft tor the amount Hot, pspsag 
k Saute African currency rated “Mot acgocJaUe" aad «k in fewer of "Sartroa fc 
Rights Otter" W H« Samuel R cg ter a re Limited, 6 Crctncoal Plate; London SMP IPt. by 
Friday ZRfc Mounter, 1987 or Cmfe Lyo-afe U, 19 Bwtemtl d» lofafa, 750BZ, 
tofe. Pm* by Ttewtay, I9th No re a bor. 1987. 

b) Holden who wtft to oWrtn a nD paid rea nnnrrrti t f tetter of afloeatfea maFor to rtgter ftrir 


supplying details with ballot 
papers, they were constitution- 
ally barred from further can- 
vassing... 


BIDEFORD DEVON 

Freehold Offices For Sale 

Prestige offices on the banks of the River Tomdge 

9,300 sq.ft.net 

D ire ctors and senior man a gement offioes, 2 Boarcftpoms, fcBchen and 
general offices. Cm pwWng and spare land for devetopmem. 


rigid to mtht mn fraction p*mm stadd tentmler comm 1 * 0 . 97, togtOor win a dab 
comMad buff listing form On dwfca t e ) to HU Samoa) Ragman Unted at tte Wow 
address by Hoidq, 23rd Wawater, 19B7 or Ci*OL Lyonais &A. al ite dm address by 
Tivsday, X9tt M— a ba r. 19S7. 

Caapam ate Mgad to Laariaa or Paris by tte Mas stead aim ate maafrty tor 
rights to Mrte team aad «■ te af aa tetter oahre. 

ftdl dttalli of tte offer are set o« la a Cfrcote- to Rnd kites Soreholdan add* Is ntebble 
from HBl Samuel Registrars LWtad and Credit Lyonais SA at tte above addresses ate 
Charter Comofldatte Sorites Utrittd, 40 Hribom VtofcsVLoodM EC1I» LU. 

Z Eidnaye af TCL Vtanaats for Rote Nan Warrant* 

CoreemM agon the company's chaage of nm In October MSS H was derided feat Store 
wanaats to bearer Aowhn the company's me as TCL noted c onil aoe te be regarded as 
mSd aotO the laa coma (No. 97) co the current sheet ftfi doe for payment. 

Wth the MBsaUoe of comma So. 97 retoned to fat p aiagaM i 2 above, criteog Otewa 
dnets teU tew become mdaemd. Holden of shoe natr on s to hearer are adrisoL 
UiereCsnt, thrita oteer to obtain reteaconm tearer docaooots, they stated « w after in 
Deceraer, 19S7 so n ateer their eristtag TCL Worsted) toge th er with a ddy co w tete 
■sting forat, to coe of the ateenneotfeoed offices?— 

HU Sand & Co Uadtod 
45 Be** Suets 
Loadoe EC2P 2LX 
Crete* Lyomott SJl 
19 Bo u l e vard des luleas 
73002 Paris 
France 


Humberts 

Chartered Surveyors 
leaHcntfor tL Yeote. Soma rat BA2Q 1TE 
Tel e phone - (0935) 77277 shmhm 


4 Bridsabnd Street, BWeford 
Devon EX392PS 
Telephone: (02372)7214® 


CROYDON 

Freehold Office for Sale 


Office building 
Addiscomb e— 2,000 sq. ft— 
two floors. Ground floor open 
plan. First floor office suite. 
PotenttalfiDr^ex-psion 


VICTORIA 

SW1 




ta **^SW e - f 5 r ^?" reL ^ WanaoUi) hahhn nU obtain « aw Wterantfs), nith ohm ate etapoat 
Nos. 98-117 indostve attached to the am of Rand Hina limited. 


Tel: 01-654 9292 


entire Office Building 
16,000 sq ft 
Lease for Sale 
Write Box No 76567, 
Financial Times, 

10 Cannon Street, 
London, EC4P 4BY 


DMded No. 96 tor tedeft paywms nfll be made agriret coupua N*. 98 urns derived m Ttandmr 
V *** * WWsad to el further notfce to I te tentesadai 

or about 4th Decanter, 19S7. 


Hteders tee advised that they may elect to recommit Hiefr share wrenots to bearer Mo reg&ured 
stares of the coopuv at any ttae. 


■ 


Freehold 

Docklands 


CAMDEN TOWN, NW1 

SmXABLB FOR BEDEVKLOWENT 

rSubfKt to pfemfcv yuiwitehiHJ 


A maatar of tte Bartow , 



Office suites 
FOR SALE 
600—2,000 sq. ft 
Michael Kalmar & Co. 
403 0600 


•eewrac a tec «f sne S^lO wore feet. 

FOR SALE BY TENDER 

CUSMMlfe 

Noon, Wednesday, Zad December 1987 


SoU Agents 

MMreim r a wmiffl aa 4tai 


ANGLO AMERICAN CORPORATION OF 
SOUTH AFRICA LIMITED (“AAC”) 

ftftotpreataf 6> the Republic of State AftfcaJ 
NteMdM No. OiOSSOm 

notice: to hol ders of shake warrants to beared 

■tote tew te Utare Ii tetrmfe Mho IMd 


International Property 


VENICE 


’ D BM B H QH AM CORPORATE 
ACCOMMODATION 




j fr ill U * I I 


1W7 Mdnui drew rennet to towtr are rente 
atetzmauQ 




STRIKING 
BUILDING 
UNIT ALONG 
M CANAL GRANDE" 
FOR SALE 


■ towta* a mdreag SJL 
nrihitl 




SOOTH MBLTM SIRBT. LONDON, Wl_ Gafeo 
«ceni feOdon btetaeto to preadsestuitoHeh; 


KWnVteinrafeb 

MreBerOreffvr.lbvtetoW 


rl, Ml — e te rn hvoywreorateii I an I n* te rn 1» 

nnr-iffitnntitm^TTwteemviiuTMiiMMMiiiMiHltei v woiW* 

mm mi tel.. >tek riVtataTISrSte UdtepS 


TUESDAY: Debate on report of 
Commons (services) committee. 


including security at Westmin- 
ster. 

WEDNESDAY: Opposition de- 
bate on transport Debate on 
motion on supplementary esti- 
mate on the purchase and sale 
ofshareslnBP. 


Flat on main floor of 600 sq m 


TELEX NO 460855 ITALY 
Please reply only If reafly 
in te res te d 


■ fcvm ar ter m* premadu te reotel ** tto mM to «tb ifeM* ate «■ be Mtaio 

TP LET WYga — WLiaWOSq. FL, rrei^ 

assisst-.— folfc 

London EC4P4BT. : 







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'“OlJlic 

attle 


Financial Times Friday November 6 1987 ' 

UK APPOINTMENTS 

Chairman of Reed paper 
and packaging division 

W CPtem. a director to the board of ASPINALL 
or REED INTERNATIONAL, HOLDINGS. Mr is chief 


try, s^MmSSBSSSm 





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Concerned... 

.more than ever, to keep you informed 
and safeguard your sport 



Clydesdale Bank PLC 


BASE RATE 


CLYDESDALE BANK PLC 
ANNOUNCES THAT WITH EFFECT 
FROM NOVEMBER 5TH, 1987, ITS 
BASE 

RATE FOR LENDING IS BEING 
SEDUCED FROM 9%% TO 9% 
PER ANNUM 


FT LAW REPORTS 


BRAY (INSPECTOR . OF 
TAXES) v BEST 
Court or Appeal (Lord Justice 
May, Lord Justice Balcemhe 
and Lord Justice Woolf): Octo- 
ber 30 1987. 

A CAPITAL siod ]nl4 to aa em- 
ployee on final distribution of a 
staff trust fond is an esalnttBt 
from kle employment, bet Is not 
taxable as such far any charge- 
able period If fie employment 
which was die source « Uk pay- 
ment ceased before the fiscal 
year in which it was made. ■ 

The Court of Appeal so held 
when allowing an appeal by Mr 
Peter Morris Best from Mr Jus- 
tice Walton’s decision (11986} 1 

FTLR 402) that sums paid to him 

on final allocation of a trust 
flmd were taxable as emolu- 
ments for a chargeable period. 

Section 181(1) of the Income 
and Corporation Taxes Act 1970 
provides that tax under Sched- 
ule E ■_ shall be charged in re* 
sped of any*, employment on 
emoluments— tor the charge- 
able period—* 

Section 183(1) defines 'emolu- 
ments* as including 'all sala- 
ries, fees, perquisites and prof- 
its whatsoever* 

LORD JUSTICE MAY said Mr 
Best was employed from fiscal 
year 1958/59 to fiscal year 1978/ 
78 by A Gallenhamp A Co. 

On April 1 1979, he and all 
other employees transferred to 
the employ of its parent compa- 
ny. Two trusts for the benefit of 
GaHenkamp employees' were 
wound np and the assets were 
distributed. 

The trustees* resolutions allo- 
cating specific sums to rfi gifcte 
employees were not made until 
December 21 1979. In fiscal year 
197980, Mr Best became enti- 
tled to sums totalling £18411 as 
bJspart of the trust fends. 

The Revenue took the view 
that the sums were emoluments 


Trust payment is outside tax period 


of his employment under sec- 
tion 181 of the Income and Cor- 
poration Taxes Act 1970, to 
which no special relief was at- 
tached. It made 21 assessments 
to income tax for the fiscal 
years 1958/59 to 1978/79. 
^Od MtB ear s apjwa^the^Spe- 

monies were emoluments from 
his employment, but that they 
could not be attributed to any Of 
the employment years from 1968 
to 1979. It followed that there 
was no chargeable period. 

The Revenue appealed. Mr 
Justice Walton allowed the ap- 
peal. He said that if money was 
paid for service as an employee, 
it must be paid for some defin- 
able period of service, or be re- 
garded as spread over the 
whole period of service. 

Mr Best now appealed, seek- 
ing to have the Special Comm is- 
Stoner'S order reinstated. 

The Special Commissioner re- 
lied on the "Source* doctrine - 
see Whiteman and Wheataq/t on 
Income Tax 2nd Ed pom 1-38: *— 
if a taxpayer ceased to possess a 
particular source of income he 
would not be taxed on delayed 
receipts from that source unless 
these were referable to, and 
could be assessed in respect of 
a period daring which he pos- 
sessed the source.* 

Counsel for the Revenue sub- 
mitted before the judge and on 
the appeal that an amainmmt 
which was a reward for services 
was an emolnment for the peri- 
od during which the services 


In Hunter v Dewlwnt 18 TC 605 
the Court of Appeal held that 
lump sums paid to two retiring 


directors, equivalent to the to- 
tal of their salaries over the 
preceding five years, could not 
be spread over the five-year pe- 
riod but formed part of their 
salaries fin * 1 their last year of of- 
fice. 

With regard to a third direc- 
tor, the focts of whose case were 
different from those of the other 
two, the House of Lords held 
that sums he received were 
compensation for loss of office, 
not income assessable to tax. 

The difference was as be- 
tween compensation for loss of 

office, ami an enudnment from 
employment No view was- ex- 
pressed in the House of Lards 
about the validity of the Court 
of Appeal view that the emolu- 
ment could not be spread over 
the five-year period. 

The Court of Appeal judg- 
ments on that point were part of 
the ratio of Us decision and 
were at least persuasive on the 
present court 

In Brumba v Miner OB76) 51 
TC 583 the House of Lords de- 
cided that payments made on 
dete rmination of a trust for em- 
ployees arose from the recipi- 
ents/ employment and nothing 
else. There was no suggestion 
that the amount received 
should be spread over years «f 
service. The taxpayer was as- 
sessed for only one year, name- 
ly the year of receipt, at a time 
when his employment was still 

in ftn‘t»arw> 

In that case there was a 
source to which payment and 
receipt could be related. There 
was a substantial difference in 
the bets of the present case, 
where the monies were re- 


ceived in the distribution year, 
after Mr Best’s employment had 
ceased. 

That an emolument from em- 
ployment was not necessarily 
one for service or services was 
shown by the decision in H am- 
btett v Godfrey (1987) STC 60. 
where payment to employees 
for . relinquishing trade yninn 
membership was held to be as 
emolument from employment, 

Mr Justice Walton’s conclu- 
sion that an emolument from an 
employment most of necessity 
and as a matter of law be attri- 


and as a nutter of law be attri- 
buted to a period of that em- 
ployment was erroneous. 

The year or years of assess- 
ment to which to attribute such 
an emolnment was a question of 
fact to be decided in the circum- 
stances of the particular case. 

From the very nature of an 
emolument for employment it 
might well be that, in most 
cases, it had indeed to be attri- 
buted to a particular year or 
years of employment But «»»* 
did not necessarily follow. 

In the present case, the Spe- 
cial Commissioner had in effect 
made a finding that receipt of 
the relevant monies was attrib- 
utable to the distribution year 
but, as Mr Best was not then em- 
ployed, there was no source for 
mat year and no liability to tax. 

That finding could not be dis- 
turbed. It accorded with com- 
monsense. Pranafade a receipt 
of an emolument was assess- 
able in the year it was received, 
unless grounds for attributing it 
to a specific previous period or 
periods existed. None existed 
in foe present case. 

The correctness of the Spe- 


cial Commissioner's decision 
could perhaps be tested by ask- 
ing how any apportionment 
would be made if U had to be 
made. 

The process would be very 
difficult On the evidence, the 
trustees had to assess the 
amounts to be paid to each re- 
cipient on the basis of their in- 
formed of a fair dis- 

tribution, not on strict 
arithmetical grounds. 

That was so despite the feet 
that they had obtained several 
computer printouts showing the 
effect of applying various for- 
mulae to ascertainable factors, 
such as length of service or se- 
niority. 

If the trustees themselves act- 
ed so. It would be impossible to 
attribute the monies on any ra- 
tional basis. 

The appeal should be al- 
lowed. * 

LORD JUSTICE BALCOMBE, 
agreeing, said that the payment, 
in so for as it was for services, 
wbs for services generally with 
no particular connection with 
any specific services or period. 

A payment which was wholly 
or partly for services generally 
should be attributed to the year 
in which It was paid, unless 
there was material which en- 
abled one to say that it should 
be attributed to some other pe- 
riod. 

If the £18411 were to be ap- 
portioned, it should be possible 
for the court to state the princi- 
ples of apportionment for the 
guidance of the Special Com- 
mmissioner. 

That was impossible in the 


light of the Special Commis- 
sioner's finding as to the basis 
on which the trustees of the 
fends arrrived at their decision. 
LORD JUSTICE WOOLF, agree- 
ing, said it was important to 
adopt the prima facie approach 
that an emolument was assess- 
able for the year in which it was 
received, unless there were 
grounds for attributing it to 
some other period. 

Payments to a past employee 
could be chargeable under sec- 
tion 187 of the Act which ap- 
plied to 'any payment” not oth- 
erwise chargeable to tax, made 
in connection with the termina- 
tion of employment 

If the Revenue's approach 
were correct, it was difficult to 
identify any scope for the 
source doctrine, the existence 
of which was not disputed. Fur- 
thermore, there would have to 
be some method by which the 
emolument could be attributed 
to an earlier chargeable period 
or periods during which the em- 
ployment still existed. The task 
would not merely be difficult, 
but would be completely hap- 
jrazard. 

The appeal was allowed. 

For Mr Best; Andrew Pork QC 
and Richard BramweU (Asshe- 
tons). 

For the Revenue: Charter Potter 
QC and Michael Mart QC (Inland 
Revenue Solicitor). 

By Rachel Davies 

B arris ter 



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IX 


MANAGEMENT 


Still a long way 
from perfection 

Clive Wolman assesses how City firms have reshaped 
their practices as a result of Big Bang 


k&LocKMG MY Best peals is one 

-THING- E&GIN& , ME oN is ANOTHER. 


U 


ONE OF the few aspects of last 
month's collapse of world stock 
markets which affords some 
comfort to City regiUatorswas 
how little money the UK securi- 
ties houses lost 

Barclays de Zoete Wedd prob- 
ably suffered the largest losses, 
of about £20m, in the first two 
days. But even that sum was 
modest in comparison with the 
capital and ordinary trading 
profits of BZW. 

One of the doomsters* most 
frequent pre-Big Bang predic- 
tions was that all the stockbrok- 
ing firms and banks going into 
market-making would quickly 
be fleeced and forced to with- 
draw as a result of massive trad- 
ing losses. And even the doom- 
sters foiled to foresee a crash 
on last month's scale. 

The confidence in the credi- 
tworthiness of the market-mak- 
ers reflects well on the strict- 
ness of the trading limits and 
monitoring imposed by their 
new owners, and on their own- 
ers’ willingness to top up their 
capital to meet the Stock Ex- 
change's liquidity require- 
ments. However, such successes 
conceal the inadequacies and 
lack of sophistication in the fi- 
nancial controls and manage- 
ment information systems of 
most UK securities firms. 

In the run-up to Big Bang, al- 
though most firms lavished 
money on information delivery 
and support systems for their 
dealers, typically £15^X30 to 
£40,000 per desk, they spent lit- 
tle on risk management 
systems. As a result many of 
those systems have three major 
weaknesses. 

The first is that, while avoid- 
ing the risks of spectacular 
losses, they often foil to pick up 
all the smaller, more routine 
risks of the newer and more 
complex financial instruments 
and trading strategies. 

Simon Haslam of the Spicer 
and Pegler accounting and man- 
agement consultancy firm tells 
of one client that lost etm from 
holding what it thought was a 
fully hedged and risk-free trad- 
ing position using shares and 
options. 

But the most serious foiling in 
the system was that no one in 
the firm became aware of the 
losses until they were discov- 
ered several months later by 
the auditors. 


Another example revealed 
last week was of a Elm debt run 
up by a young private client of 
County Natwest Securities who 
was writing put options on the 
stock market index just before 
the collapse. 

The second criticism Is that 
the controls on traders taking 
positions are often arbitrary 
and crude. For example, trad- 
ing positions are often only as- 
sessed at the end of the day 
rather than hour by hour, let 
alone minute by minute. Few 
systems also allow traders to go 
over their limits to carry out a 
deal with sufficiently wide prof- 
it margins, except by seeking 
special permission. 

Another foiling is that most 
banks do not attempt to aggre- 
gate their total risks exposures 



PART FOUR! 
CONTROL SYSTEMS 


in their different divisions and 
regions around the world. For 
example. Midland Bank has two 
subsidiaries that trade German 
equities, Greenwell Montagu 
Securities in London and Trin- 
kaiis and Burkhardt in Dussel- 
dorC 

But the absence of a central 
monitoring system means that 
the positions of the two banks in 
any stock cannot be aggregated 
or ofiket against each other. The 
result is that the market-makers 
in the two firms are subjected to 
much tighter than necessary 
limits on bow many shares they 
can buy or sell. By contrast, the 
successful gilts and treasury de- 
partment of Midland/Greenwell 
operates financial controls on a 
centralised and integrated ba- 
sis. 


Mark Austen, who heads the 
financial services consultancy 
of Price Waterhouse, believes 
that, as a result, UK banks are 
foregoing profit opportunities. 
Traders became demotivated by 
the heavy-handed controls and 
do nothing more imaginative 
than take small long or short po- 
sitions. 

A study by Coopers and Ly- 
brand shows that, at least in the 
foreign exchange market, such 
positron-taking by large banks 
has negative or at best zero re- 
turns. In the UK equity market, 
similar competitive pressures 
towards zero returns nave been 
concealed by the upsurge in 
prices during the first 11 post- 
Big Bang months and the natu- 
ral propensity of traders to run 
long rather than short positions. 

The prospect of having to seek 
special clearance to breach a 
position limit deters traders 
from fUlly exploiting the more 
genuine profit opportunities 
which may arise from a pricing 
anomaly or a large offer of 
shares. 

The advantages of a lighter 
touch are shown by the un- 
matched degree of autonomy 
given to James Capel by its own- 
er, the Hongkong and Shanghai 
Bank. This has allowed it to be- 
come the market leader in buy- 
ing large tranches and portfo- 
lios of shares from customers 
and reselling them profitably. 

The ultimate form of risk 
management would be a global 
minute-by-minute monitoring 
system of all positions taken by 
the different sections of a bank. 

No bank, it is thought, has 
such a system at present, al- 
though Aram Shishmaniam of 
Arthur Andersen management 
consultants, says that his firm is 
developing one for a UK bank 
which will monitor trading and 
settlements in bonds, curren- 
cies and equities. 

The system is due to come on 
stream la phases during next 
year. Some of the large US com- 
mercial banks, in particular Ci- 
ticorp. Bankers Trust and Chase 
Manhattan, are developing sim- 
ilar capabilities. 

Ironically, the other type of 
control system that appears to 
work well is at the opposite end 
of the technological spectrum. 
The leading UK equity market- 
maker, Smith New Court, sets 
no position limits for its traders 



and eschews computer monitor- 
ing. 

Instead its directors spend 
most of their working days on 
the trading floor watching ev- 
eryone's positions, pooling in- 
formation and shouting instruc- 
tions as prices change 

It is the inability of most secu- 
rities firms to identify profit- 
able and loss-making activities 
that forms the third and most 
serious criticism of their finan- 
cial controls and management 
information systems. According 
to Angus Hislop of Coopers and 
Lybrand: "When we have 
brought In people from outside 
the industry, they have always 
been shocked by the poor level 
of controls. The directors rarely 
know where they are 
their money because they have 
difficulties in allocating costs 
and revenues.” 

These difficulties are partly 
conceptual For example, how 
should costs and revenues be 
allocated when an institutional 
investor 'pays’ a securities firm 
for its research notes and re- 
commendations on. say, con- 
struction companies by giving it 
a flow of commission-free deals 
plus a small amount of commis- 
sion on deals in non-construc- 
tion stocks? These difficulties 
arise because firms have not 
taken advantage of the ending 
of the fixed commissions cartel 
to unbundle their services and 
charges. 

A more serious obstacle is 
that attempts to allocate reve- 
nues and costs become highly 
contentious and politicised, 
particularly when an employ- 
ee’s bonus is determined partly 
by the assessed profit contribu- 
tion of his unit 

According to Hislop: "Many 
urms have not tried to work out 
exactly where their money has 


come from, because people get 
so uptight They say, ‘if you are 
making money, why contem- 
plate your navel? 1 But in the Eu- 
robond market all that changed 
when they started matting 
losses. Then you have to decide 
what parts to cut” 

Despite the criticisms,' most 
former stockbroking firms 
agree that they would have 
been in a much weaker position 
- and less able to take risks • 
without the imposition of risk 
management and strict finan- 
cial and budgetary controls by 
their new owners. 

For example, these axe some 
of the controls that Chase Man- 
hattan has Imposed on the two 
stockbroking firms it acquired 
and merged, Simon and Coates 
and Laurie Mil bank: daily re- 
porting of profits and losses, an- 
nual and monthly budgets 
which cover everything down to 
travel and entertainment, coun- 
terparty limits, credit limits 
and position risk limits. 

According to Peter Stevens, 
the former senior partner of 
Laurie Milbank and now a di- 
rector of the merged firm: "All 
these controls were considered 
terrible paraphernalia. People 
thought that their style was be- 
ing crumped. But we had to inte- 
grate into a more structured en- 
vironment We’re quite pleased 
that we went through this pro- 
cess. but there are always some 
people who are so dyed in the 
wool that they cannot change 
their style whatever happens.” 

Citicorp, too, injected a dose 
of realism into the strategic 
planning and budgeting at its 
UK securities subsidiary, Citi- 
corp Scrimgeour Vickers. “They 
told us to scale down our pro- 
jections for the next five years,” 
says John Hewitt, managing di- 
rector. "They said they were 


prepared to take a five to ten 
year view before we get an ade- 
quate return on capital* 

By contrast, Schroder Securi- 
ties, with severely restricted ac- 
cess to capital and no inlection 
of commercial bank-style bud- 
getary and risk management, 
has adopted such a limited low- 
risk stance in the UK equity 
market that its presence is 
barely noticed. 

Apart from tough-minded par- 
ents. another source of finan- 
cial controls on securities firms 
is now emerging, as the Finan- 
cial Services Act takes effect 

Attitudes towards the Act are 
mixed. County Natwest and 
some European banks have 
complained loudly about the 
complexity of the new regula- 
tions. 

But most leading securities 
firms, such as BZW, Klein wort 
Grieveson, Morgan Grenfell and 
Phillips and Drew, believe that 
the compliance costs are rea- 
sonable. 

Several firms admit that the 
sophisticated capital adequacy 
rules of the Securities and In- 
vestments Board provide a su- 
perior method of controlling fi- 
nancial risks thaw the methods 
they were previously using. 

Peter Quinn en, mnnnp in g di- 
rector of James Capel, wel- 
comes the discipline imposed 
by the Act It will be a good 
thing for our internal policing. 
It helps us to focus on the ad- 
ministrative side rather than 
the productive side, which Is 
important because we do not 
have a parent that requires to 
know how many times we have 
sneezed.” 

.This article concludes this series; 
previous articles appeared on No- 
vember 3,4 and S. 


Financial Times Friday November 6 198" 

Real bankers 
don’t manage’ 

Christopher Lorenz reports on an identity 
crisis in the US investment industry 


ARE THE LEADING Invest- 
ment hanks on Wall Street any 
better at managing themselves 
than their counterparts (and 
offshoots) In London? And will 
they necessarily be more suc- 
cessful at confronting Japa- 
nese competition? 

Not if a remarkably frank 
bevy of senior Wall Street 
bankers is to he believed. 

"We’ve made dramatically 
bad business a dmini stration 
derisions - we continue to head 
in a shecm-Uke way for the 
most popular areas of busi- 
ness,’ Steve Friedman, a part- 
ner at Goldman Sachs, told a 
strategy conference in Boston 
last month. 

"There's chaos throughout 
the system - everyone’s having 
a bit of an Identity crisis, rath- 
er like America's steel compa- 
nies did a few years ago,” con- 
curred Bruce Wasserstein, 
managing director of First 
Boston. For one thing, 'every- 
one has the wrong computer 
systems." More ftprdamen tally, 
most firms had entered such a 
wide range of businesses that 
they now run the risk of "incur- 
ring all the overhead without 
securing a sufficient return 
from c on centr a tion in key ar- 
eas.” 

As for the Japanese threat, 
Peter Solomon, vice-chairman 
of Sheanou r-rfmnm, declared 
that the only distinctive com- 
petence his firm possessed 
against the mighty Nomura Se- 
curities *2s that we speak En- 
glish.' TO which Friedman ad- 
ded that 'anything Namura can 
turn Into a commodity, they 
wilL Their entry into high 
margin businesses is frighten- 
ing.” 

Friedman’s litany of 
aOrroond management IHs in 
US I wt iMiit Hanking shook 
his audience at the seventh an- 
nual conference of foe Strate- 
gic Management Socie^, an in- 
ternational association of 
business executives, consul- 
tants and academics. 

FOr a start, said Friedman, 
(he management process Itself 
is not highly valued. "No-one in 
investment honMwg went Into 
it intending to be a manager. 
Management was something 
that real men didn’t do.* Top 
salesmen had became manag- 
ers only because they wanted 
the extra prestige. 

Firms had not had time to 
build the layers of leadership 
necessary to sustain their fest 
rate of expan si o n. The busi- 
ness graduates wbo’ve ponied 


in haven't had a chance to 
prove themselves.” 

Otiurflls included: 

• A lack of communication be- 
tween traders and the technol- 
ogy experts responsible for de- 

information systems. 

• The mstasti-y’s ”prima donna 
workforce” enjoyed "an unsus- 
tainable compensation struc- 
ture. Yet no-one Is able to 
changeit.” 

• The industry did not really 
knew what its variable costs 


Superimposed on all these 
problems, said Friedman, had 
been Intense p l easu r e to inter- 
nationalise, for example "by 
competing with hordes of oth- 
er kmniiap in the London 
gilts market' 

The development of firms in- 
to 'global players" operating in 
New York, Tokyo and London 
had created a further set of dif- 
ficulties. 

Matrix management had 
been taken "to its farthest ex- 
treme.' For instance, it was un- 
clear whether government 
bond dealers in London report- 
ed to London or New York. 

*’ New products now tended to 
appear overnight, requiring 
interdependent operation be- 
tween widely dispersed parts 
of the organisation. "So we 
need a flexible eulture of a 
kind that exists in no other 
business." 

US investment banks were 
ao longer just facing competi- 
tors with similar structures 
and risk-reward ratios. In- 
stead, they now Jutd a wide- 
ranging set of very different 
competitors: the Japanese; Eu- 
ropean universal banks; and 
even non-banks. Many of these 
challengers were busDy trans- 
forming prev i o us niche bank- 
ing businesses into standard 
comnmdities: 

Also,’ the established cul- 
tures of some investment 
banks were ne longer appro- 
priate. "But how do you change 
a culture?" 

Injecting the only note of op- 
timism into the debate, Solo- 
mon of Sbearson claimed that 
"this industry Is materially 
better managed than it was 
five years agOb' Yet some firms 
now needed to sHm in order to 
regain their lost vitality - 
hence the swingeing staff cuts 
which Salomon Brothers an- 
nounced last'month. For some 
reason, Solomon was too mod- 
est to dte Shear-son's own au- 
tumn slimming exercises in 
sifldltf 


NEW ISSUES December 3. 1986 



FannieMae 


$1,000,000,000 

% Debentures 

Dated November 10 1967 Due December 10. 1990 
interest payable an June 10 1968 and semiannually thereafter 

Series SM-199G-M Cusip No. 313586 YD 5 
Non-Callable 


Price 


% 


$700,000,000 

% Debentures 

Dated November 10. 1987 Due November 10. 1994 
Interest payable on May 10. 1988 and se mian nually thereafter 

Series SM-1994-D Cusip No. 313586 YE 3 
Non-Callable 


Price 


$600,000,000 

% Debentures 

Dated November 10. 1987 Due November 10. 1997 
Interest payable on May 10. 1968 and semannuaHylbereattet: 


Series SM-1997-F 
Non-Callable 


Cusip No. 313586 YF0 


Price 


% 


The debentures are the obligations of the Federal National Mortgage Association, 
acoraoration organized and existing under the laws ot The Umted Stales, and 
aro issued under the authority contained in Section 304<b) of the Fedenrf 
National Mortgage Assocabon Charter Act [12U SC. i7iaeiaeq I 

T he debentures . together with any interest rtiereon. are not guaranteed by the 
United States and do not constitute a debt or obligation of Die United States or 3f any 
agency or Hicrrm remality thereon other than Fannie Mae. 

This offer mg re made by the Federal Narional Mortgage Association 
through its Semer Vice Rresident-F i nance and Treasurer with the assistance 
of a nationwide Selling Group of recognrzed dealers in securities. 

Debentures will be available m Book -Entry form on)* 

There win oe nc definitive securities offered 


Gary L Perfin 

Senior vfee PnsH/ent- 
Ffenncomf Ttmaurer 


Linda K. Knight 

WesAwtMmrancf 
Assistant PoS***r 


3900 Wisconsin Avenue, NW. Washington, DC 20018 
77us announcement appears at a matter ofrocontoVy 


NOTICE OF REDEMPTION 
To the Holders of 

ENTE NAZIONALE IDROCARBIJRI 

E.N.L 

(National Hydrocarbons Authority) 

634% Sinking Fund Debentures dne June 1, 1988 

NOTICE IS HEREBY GIVEN that, pursuant to the provisions of the Sinkkw Fund for the 
Debenture of the above-described issue, Morgan Guaranty Trust Company of New York, as 
Fiscal A cent, bas selected by lot for redemption on December 1. 1987 at the principal 
thereof $750,000 principal amount of said Debentures, as follows: 

Outstanding Debenture* rfUS. 1 1.000 Each of Ptefix “ST Bearing Serial Numbers 
Ending in the Following Two Digits: 





18 

52 

59 

S3 

78 

79 


Mao 

Debentures of U& $1,000 Eads of Prefix “H" Bearing the Following Serial P 

TO 


PI 


9739 


15039 

19239 

20939 


=39 


Ki/Tl 


9839 


15239 


21039 


633 


ai39 

8239 

9939 


15729 



B n '- * ] 

TZ3 




10039 


16139 


21539 


IK9 








21639 


1239 





12839 



21939 


1339 



8*39 



17839 


22039 

28139 

2939 

4939 


8839 



18539 




3339 




■ 11^1 

12999 

18839 




3*39 




11239 

13499 

tS739 



28S39 

3529 




11339 

13839 

18839 




3639 


7439 


11739 

14239 

18939 




3739 




1IB39 

14339 

19039 




3939 


■ffj 


11939 

14839 

19139 



28939 


On December L 1987, there will become and be due and payable upon each Debenture the 
principal amount thereof, in such coin or currency of the United States of America as on said 
date is legal tender for I he payment therein of public and private debts, at the optioned the bolder, 
either (a) at the corporate trust office of Meipn G ua r anty Trust Company of New York, 
13tb Floor, 30 Wien Broadway; New York. N.Y. HK)tS,or(b>subject to any laws and regulations 
applicable thereto with respect to the payment, currency of payment or otherwise in the country 
ot anv of the following offices, at the principal office of Baxtca Naxioi 


— — , — _ . , Nationale del Lavoro in Rome or 

the principal office of Banca Commerciide Italian* In Milan or the main offices of Morgan Guaranty 
Trust Companv of New York in London, Brussels. Paris or Frankfort or the main office of 
Algemene Bank Nederland N. V. in Amsterdam or the main office of Kredlethank 5.A. Luxcro- 
bourgeoise in Luxembourg- ViiJe. Payments at the office of any paying agent outside of the United 
States will be made by check drawn on, or transfer to a Untied Senes dollar account with, a 
bank in the Borough of Manha tt an. City and State of New York. Any payment made by transfer 
to an account maintained bv the payee with a bank in the United Stales may be subject to re- 
porting to the United States Internal Revenue 5cnice ( IBS ) and to backup withholding at a rate 
of 20Po if payees not recognised as exempt recipients foil to provide the paying went with tux 
executed IRS Form W-& certifyinaunder penalties of petjury that the payee is not a United States 
person or an executed IAS Form w-9. certifying under penalties of perjury the payee's taxpayer 

Those holders who are required to provide their correct taxpayer identification rnxmbCTwTSt^TOl 
Revenue Service Form w-9 and who fell to do so may also be subject to a penalty of $50. Please 
therefore provide thd appropriate certification when presenting your securities for payment. 

Debentures surrendered tor redemption should have attached sH unsutured coupons appujtc- 
rtar.t thereto. Coupons due December 1, 1987 should bedetacbed and collected in the usual manner. 

From and after December 1, 1987 interest shall cease to accrue an the Debentures herein 
designated for redemption. 

ENTE NAZIONALE IDR0CARBURX 

By: MORGAN GUARANTY TRUST COMPANY 
orncwToax. fucaldgsM 


October 30. BB7 . 

NOTICE 

The following Debentures previously called for redemption have not yet been p rese nt e d for 

payment; 

DEBENTURES OF ILS. *1,000 EACH 
3068 138U 17831 171-32 17841 


SELL YOUR HOUSE 

Through the Weekend 
FT Property Pages 

0 CALL 01-489 0331 NOW 





State Bank of India 


announces 


that its base rate 


is reduced from 


9.5% to 9% per annum 
with effect from 


November 5th/ -1987 


Main Office in file UJC. 

State Bank House, 1 Street, London EC2 




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-^QUite a cocktail of famous names, isn't it? 
ilPropi the iiiteniationaUy successful and well 
established J & B Rare Scotch Whisky to the equally 


successful, innovative and fashionable Malibu. 


J & B is the world's second largest selling whisky 


Malibu has rapidly expanded from a tiny test 


market in =1980 into 100 countries with over a million 


cases sold in 1986. Consumer research highlighted its 


potential. IDV's marketing expertise linked with 
Grand Metropolitan’s financial muscle allowed it to 
prove that potential, quickly 


Then there's Black Velvet, Croft Original, Gilbey's 


Gin, Piat d'Or and of course Smirnoff; the world's 
biggest selling vodka with 168 million bottles sold 


every year. 


If you take the top off any of its drinks brands, 
including a relative newcomer like the outstandingly 
successful Bailey's Original Irish Cream, you'll find out 


a lot about Grand Metropolitan 


Because Grand Metropolitan never just acquires a 


business; it makes it better, 


Grand Metropolitan is now one of the UK's 


largest, most broadly based international companies 


Its strengths are Specialist Retailing, Drinks, Food and 
{Hotels & Gaming. By building on these strengths it is 


Succeeding in more countries and with more customers 


And it is still growing rapidly 


Which isn't surprising. Its philosophy is, after all, 


to develop and add value to all its brands, businesses 
and properties 


It's working. The rewards are just pouring in. 


GRAND METROPOLITAN 


adding value 


AV 












































Financial Times Friday Wmcmhtfffl W*7 


TECHNOLOGY: Computing 

Blue collars move 
softly 
to the fore 

How the software Industry is finding 

that the customer is always right 

J OHN DELAY, president and chief executive 
officer of Management Science America, 
the largest vendor of packaged mainframe 
•application software, uses the collar test to 
distinguish different kinds of manufacturing soft* 
ware. 

'The back office uses white-collar software - bill of 
materials and materials resource processing. On the 
shop floor you find blue-collar software collecting 
data and controlling the manufacturing process.” 


■ — ■- — gutaaL 



-Open-collar software is part 
of the drawing office - computer 
aided design and computer 
aided engineering. Robots on 
the shop floor are controlled by 
steel-collar software. Button- 
down software, of course, runs 
the company.” 

ini lay may not be too serious 
about his definitions but he is 
serious about manufacturing 
software, which be sees as one 
of the principle growth areas in 
packaged software over the 
next few years. 

Traditionally a vendor of 
mainframe-based accountancy 
packages for large companies - 
general ledger, bought ledger 
and so on - MSA is now in the 
latter stages of digesting: Corn- 
serve, a recently-acquired com- 
pany specialising in 
manufacturing software. It spe- 
cialises in the kind of back of- 
fice software Imlay would 
define as "white collar”. 

He is not alone in believing 
that manufacturing is a poten- 
tially profitable area. One of his 
main rivals In accountancy soft- 
ware, McCormack & Dodge, is 
following a similar strategy, as 
has Culunet, a systems i 
vendor. 


Manufacturing 
programs will be 
a principal 
area of growth 


It is at least in part a reaction 
to relative saturation in these 
companies’ traditional markets 
of accounting and human re- 
sources. Robert Therrien, a re- 
spected software analyst with 
New York stockbroker PaineW- 
ebber, noted recently: ”We fore- 
see future pressure on margins, 
high volatility and increasing 
competition in this segment* 


WANT A SOFTWARE 4>ACJC ME Tftor JOGS ^ 

Evs?vrtm5 bcc&t f=«e people- { still 
£MJ0V DoiNg THAT MAKUALLV r 



"MSA, McCormack & Dodge 
and a couple of smaller players 
continue to fight over the few 
sites which do buy each 
having refocussed their 
at wooing new customers with 
vertically integrated strategies, 
and their installed bases with 
product extensions and up- 
grades.” 

ien explains 1 
ware vendors’ profits are hard 
hit when their market segment 
saturates, able to sustain their 
revenues only through selling 
maintenance at about IS per 
.cent of the cost of the package 
or add-on modules. 

So MSA is in transition. Onhr a 
few years ago it was the undis- 
puted leader among indepen- 
dent software vendors, but now 
it has been relegated to fourth 
Gt will turn over about 
this year), first by the 
atic growth of Lotus, which 
markets the best-selling 
sheet 1-2-3, and 


signer of micro 
system to IBM, and by the merg- 
er of Computer Associates and 
UcceL both specialists in IBM 
ie 



It is no 
ter software, 
microcomputer 
Peachtree failed 
cost structures 


In mil 

‘ ofi 

company 
because its 
were ill- 


So what trends does Imlay see 
in the industry? 

The major change he identi- 
fies is the growth of "User pow- 
er”: The end user (business 
executives rather than data pro- 
cessing staff) has become much 
more dominant. In my most re- 
cent tour of Europe and the US, 
I have found that it is end users 
who are coming to presenta- 
tions now rather than data pro- 
cessing professionals.” 

They got their strength and 
independence from the person- 
al computer. Now they are 
looting seriously at software,” 
says Imlay. 

He also sees powerful signifi- 
cance in IBM's new strength in 
the market place, attaching par- 
ticular importance to its 
Systems Applications Architec- 
lture (SAA) and its increasing 
domination of the database ar- 
ea with DB2. 

Cullinet, which had ruled the 
roost in mainfrane database 
software, was "devastated” by 
DB2. Therrien of PaineWebber 
says: ”Cullinet’s diversification 
into software for manufacturers 
saved its neck in 1985 and IMA" 

Imlay believes that the fan In 


equipped to deal with selling to 
small companies a product with 


ora 


pnee. 


It does offer the kind of soft- 
ware which makes it possible to 
use microcomputers in a main- 
frame environment - or to use 
mainframes as if they were mi- 
cros. Its fourth generation lan- 
guage Information Expert” 
wafcM it easy for its users to de- 
sign mainframe reports as if 
they were sitting at a personal 
computer. Costing 
$30,000 and *10p0p 


A powerful 
significance Is 
seen in IBM’s 
new market strength 


share 

rary 


Ices will put a tempo- 
to the frenetic round 


wiimframa 
a micro. 


and jg0q,00p it gives the 


look ana feel of 


of mergers and acquisitions in 
the software and services busi- 
ness. He thinks that became of 
the individual nature of the 
software business, large compa- 
nies bargain hunting are not a 
threat “They have to consider 
what they are buying; I cannot 
even imagine a hostile take- 
over.” 



COME TO BRUSSELS SEE THE WORLD 


You international traveDen know a 
t hin g or two. 

You certainly know Bnissds-cap- 
tai of Europe, historic meeting point 
of cultures - as a popular destination 
or stopover. 

But did you know that Brussels 
International airport is a European 
hub that offers you fast connections 


to anywhere in me world - and spa- 
res you the traffic jams and crowded 

terminals of bigger cities? 

Did you know that Sahara is the 
leading sa l ine se rvi n g the Afnamcon- 
tmeat, with27 destinations? Or that 
we can By you from Brussels to any 
destination in North America, via 
8 itracegic gateways -the .same day? 


It’s a small world at Brussels 
International airport. 


BELGIAN WORLD AIRLINES 
SAVOIR - FAIRE IN THE AIR 


BY ALAN CANE 


There may be equivalents 

but there are oo equals. 


Window on the world 
of electronic data 



NORTH AMERICAN companies 
make five times as much use of 
on-line databases (electronic 
information sources) as Europe- 
an ones and the chief reason 
seems to be greater ease of ac- 
cess. 

IsteL formerly the informa- 
tion technology arm of the Ro- 
ver Group which was bought out 
by its management some 
months ago, aims to redress the 
balance in the UK with a ser- 
vice it callsTnfosearch". 

It is basically a simple, mod- 
erately-priced common window 
on the world's major electronic 
databases which allows infor- 
mation to be sought and identi- 
fied without complex operating 
procedures. 

There are some 2^)00 on-line 
databases companies offering 
information for sale in the US 
and some L000 In Europe. Ex- 
amples include Profile, former- 
ly Datasolve World Reporter, 
which the Financial Times 
bought two weeks ago from 
ThomEML 

US examples are Dialog, ADP 
Network Services, BBS, Datas- 
tar and NewsneL 


Customers have a number of is launched on December L 
objections to mating greater there will be four - Profile, Info- 
nse of these high-speed" ihfor- check a fast growing credit 
station sources. They chum that checking company. Dialog ami 
access is too difficult, especial- Jordans, 
ly for the untrained and that Experienced users will be 

Easier access to major databases should 
help boost the use of such information 
services by European companies 


they have to lean a different 
set of commands for each data- 
base. They also object to a mul- 
tiplicity of charges and wrung, 
one for each service. 

Istel is attempting to 
matters easier by finking to- 
gether two facilities: its own da- 
ta network, Infotrac, with some 
68 access points in locations 
throughout the UK, and Tele- 
base, a US service based on ar- 
tificial intelligence methods. 

At its simplest, Infosearch of- 
fers a single telephone number 
a user can call to gain access to 
databases resident on the Info- 
trac network. When the service 


connected to the database of 
their choice via the Infotrac 
network where they can search 
the electronic files using the 
conventional procedures they 
know and understand. 

Inexperienced users, howev- 
er, or those who do not know on 
which database the information 
they are seeking resides, can 
ask the system to make the 
choice for them. 

In this case, the customer is 
switched through to the. Tele- 
base computers in Philadel- 
phia. Here an expert system 
sets np a series of questions de- 


signed to elucidate what kind of 
information the customer wants 
and where Si is likely to be 
found. 

Customers can. of course, sim- 
ply ask for a database or their 
choice. But whether the custom- 
er chooses the database or the 
system makes the choice, the 
search procedures are common 
for all databases, eliminating 
the need to learn separate que- 
ry languages for each. 

Istel seems to be meeting a 
powerfully felt need in the UK 
It sent a test mailing to some 700 
companies of which 70 signed 
up in the first week. 

Costs for the service are simi- 
lar to those charged by individ- 
ual on-line database compa- 
nies. A credit search through 
Infocheck costs £10 per report, 
for example. 

Searching through the Profile 
database costs £1-33 per minute 
of connection. There is a one- 
time charge of £100 for each us- 
er password issued. 

All the customer needs to 
gain access to the network is a 
personal computer or terminal 
fitted with a modem. 


Why cabling is for live-wire managers 


THE CABLING of offices has 
traditionally fallen to the build- 
ing services department; senior 
management has not felt the 
need to become i n vo l ve d with 
what seems essentially to be a 
mundane, non-strategics activi- 
ty. 

The advent of the "intelligent 
building’ and information tech- 
nology is changing this percep- 
tion. although not as fast as spe- 
cialists in information 
technology wo old like. 

They agree that the day of the 
stand-alone personal computer 
is well-nigh over and that mod- 
ern business needs will be met 
best by ne t w o r k s of worksta- 
tions tied together into single 
information processing systems. 

The problem is that network- 
ing is such a new concept for 
most businesses that there is no 
readily available source of ad- 
vice and guidance, either for 
choice of networking philoso- 
phy or method of erahllng- 
(There may seem to be a large 
intellectual difference between 
deciding on a networking phi- 
losophy and deciding how to 
run a few kilometres of copper 
or fibre optic cable through a 
building, but the two questions 


are ) 

And, as Jeremy Bent of BICC 
Data Networks discovered 
when he earned out a market 
survey of some 50 leading com- 
panies, senior managers . are 
both abysmally ignorant and 
'unconcerned about the implica- 
tions of implementing data net- 
works. 


The «mm network installed 
in an old building in, my, the 
City of London, can cost £180 
per te rminal. The difference in 
cost where a network of several 
hundred or thousand terminals 
is to be installed will be hnge. 

Among the horror s network- 
ing companies come upon when 

meaMliy aid bnlWiwwt are enn. 


The day of stand-alone personal computers 
is well-nigh over. Modem business needs 
will be best met by networked system. 


Win flmllnp winSriq the 

views of established networking 
and cabling authorities like 
Eosys, the office systems con- 
sultancy, and Roger Camrass of 
the Butler Cox group. 

The facts are, first, that there 
is a complete lack ofperoej 
of the cost of cabling a 
for modern ne tworki ng in most 
companies. 

Bent reckons that in a new 
building, property designed for 
networking, Cabling costs for. 
each terminal or personal com- 
puter can run to about £80. 


doits already filled to overflow- 
ing with unmarked cables and 
vertical and horizontal conduits 
so badly matched that cables 
miwmw be threaded through 
them. It all sounds thoroughly 
pedestrian, bat it can prove un- 
expectedly expensive both in 
time and money. 

Second, there is little practi- 
cal experience of net w o rk ing, 
even "ring systems such as 
IBM’s "token ring”. The token 
ring is a technology IBM has 
adopted for networking person- 
al computers together in local 


areas bat it has yet to deliver its 
token ring products in volume. 
Customers talk of installing 
large token ring networks, but 
the largest Bent has been able 
to trace in Europe has only 30 
nodes or terminal connection 
points. 

Today. BICC is holding in 
London the first of four ses- 
sions, to be called the 'Informa- 
tion Exchange", at which the 
problems of networking and ca- 
bling will be explored before an 
invited audience. 

The speakers will include 
runiTMi of Butler Cox. David 
Honey of Deloittes. Brian Amey 
of Electrical Installations and 
Don Roworth of BICC. 

David Firnberg, managing di- 
rector of Eosys, has promised 
practical guidance in the form 
of management consultancy to 
companies attending the second 
session early next year. 

The idea Is to keep the ses- 
sions small and informal with- 
out (BICC excepted) vendors 
pres en t Companies interested 
in sharing their views and expe- 
rience can contact Jeremy Bent 
Ofi 044223100a 




LegalNotke 


IN THE HIGH COURT OF JUSTICE 
CHANCERY DIVI5I0N- 
*f vm 

IN THE MATTER OF 
FRAN EUROPE LIMITED 
1 and 

IN THE MATTER OF 
THE CO MPANIES A CT 1985 

MOnCE IS HEREBY GIVEN tW( BeMon watM 
Sm 1M October 1987 presetted to Hw Matetort 
MW Court of Jam* far the cwfluuM te of toe 
reduction of the capltM of tire atoNL-wMf ctwpaqf 
teom £4X00 JODO to £2.000,000. 

AND NOTTCEIS FU CTHHTg WES tttt *e tt* 

PMSh b tflrectod la be tad before tire HmrJ 

able Mr Jar** Peter moa atfbe Serf Carats of 

Jotter Strang London WC2A 2LL, oa Moaday tire 
Utt dv of Nonmbar 198J. ■ 

ANY Croflar or Sferataldar of the aid Cuapay 

dmfctag to appose (be naUng at m Order far tht 

catflmwtaa of the sttd redaction of capital ttottd 

■PMar at toe date of bevtog la panan or hr OaMt 

for tat purpose. 

A «8W of too sold Petltioo wfB be fenttwd to a* 
socb poison ragtag tta am tv tot Mfcrana 
Honed Sofldtacs no payment of too rvgW ' 
far the sura. 

BMW Ml M do of Monster 1587. 

"toML SMta 
a 


Ho. 0047*7 of 1987 
Uf THE HICH COURT OF JUSTICE 
CHANCERY DIVISION 

IN THE MATTER OF 
I TWEUR8PC U MITE S 

I AND IK THE MATTER OF 

HIE COMPANIES ACT 1985 

NOTICE IS HEREBY GIVEN ftttlbe Oris- oftfet 
MW Coat of Jrtfct Ctancenr Mddon Mtf 130 
tetober 19B7 atfkmiag the redoctiaa of toe Shn 
Prendom AccauM of tfc> obo wn d C wpT to 
049(9,000 mb rods to ted twtoe Regbtrar «f 
C— Quill an lttfc October 1987. 

OMM Mi SM *y of Knatoer, 19S7 
Clifford Ctence 


19 New Bridge SUMl 
LONDON EC4V6BY 
SMdttn fartta 


m THE HI8H COUNT OF JUSTICE 
CHAU CUT DIVISION . 

Mr R a g b f rw Join Bradbum 
Friday the 9tti Mar of October, 1967 
M THE NATTER of 6. R. WOUINES) pfc 
AND IN THE NATTER OF THE COMMWES ACT MB 

NOTICE IS HERESY GIVEN ttal the 
Order of the High Cent of JuMce <Om«h 
eery Dfvfslaa) doted 9th October, 1967 
con fi rm in g the redaction ol the cental of 
the above named Company from 
£3,000,000 to £2,950,000 end the 
Minute a pproved by the Cowt otaowtog 
with respect to the capital of the Company 
as altered the se ver al parti cutan required 
to the obuva nunilnnnri Act were regla- 
tered by the Regis tr ar of Compan ie s on 
20th O c t o be r . 1967. 

Dated this 22nd day of October 1967. 
■toques & L*wt* 

2, South Squere, 

Gray's Inn, 

London WC1R 5 HR. 


Personal 


DGB WK£d 

DMune O O MUHn e Mfw t w* 


A memorial service for 
Pat Harvey will be held 
on Monday. November 
9th, at SL Mary-le-Bqw, 
Cfreapside, ECS, at 1J.45 
am. All friends and 
business colleagues most 
welcome. 


Contracts and A Tenders 


TENDER NOTICE 

MALAWI 

FERTILIZER— SMALLHOLDER REQUIREMENTS 1988/89 SEASON 

The Government of the Republic of Malawi and Agricultural Development and Marketing 
Corporation have a Fertilizer Revolving Fund held with Reserve Bank of Malawi. The 
International Fund for Agricultural Development (IFAD) and International Development 
Association (IDA) have contributed to the Fertilizer Revolving Fund. The Fertilizer Revolving 
Fund will be utilised exclusively for the procurement of fertilizer for the Malawi Smallholder 
Sector's 1988-89 season requirements. 

. Tendering procedures will be in accordance with IFAD and IDA procurement guidelines: 

Brief details of the fertilizer required are as follows: — 

Between 10,000 and up to 20,000 metric tonnes NPK compound 23:23:0. 
Between 15,000 and up to 25,000 metric tonnes calcium ammonium nitrate. 
Between 10,000 and up to 15,000 metric tonnes urea. 

Between 5,000 and up to 10,000 metric tonnes DXV.P. 

Between 5,000 and up to 10,000 metric tonnes of sulphate of ammonia. 

The dosing date of the tender is 8th December 1987 and Tender documents may be 
obtained by any interested bidders from the address below: 

V MALAWI FINANCE COMPANY LTD., 

ROMAN HOUSE, 

WOOD STREET, 

LONDON, 

EC2Y 5BP. 


Legal Notice 


IN THE MATTER OF 
bratbn ENGINEERING unites 
AM) IN THE MATTER OF 
THE CYPRUS COMPANIES LAW 

CAP 113 

NOTICE IS HEREBY GIVEN Sn fro owDon of 

- MCoq 


midnQ anreq^ Morbriore Uw7lhiby d 

Dicowfiir 1987 to ml lo Mr M ohl Mr 

■f i fwww MMrlptiodL faO part kufcn of tMr 

(Mori qtoMthenq^icdidMsisofM 

qoReHor Of any) ts tit ifrnl will Mr. Attar* 

SEESSafaMaBS-J 

SKHMaNassaas 

■rate before mb debts «■ proved, ■ 

(MM Ml Ml dnr of NtMmbcr 3987. 

A. HAJIft&mOS. FCCA, 


IN THE MATTER OF 

ADMN 

(ABWMSniATSRS and CSNSULTANTS) 

LIMITED 

AND IN THE MATTER OF 
THE CYPRUS COMPANIES LAW 
CAP U3 


WTICE^ISHB ^Y G IVEN rhtt tto q gftw of 

raid op «nqulRd u a Monte w!*wcJ 
r «B7| to *«l to ty. Ml a anc. tbek 

ail kfaw | UT ^gi^fUf | 5|MteSwod' t HF ito£% 
P F 1 ?* Strw fr. p ‘ 0 -. Hlmaa^^tS 

pnortfyor by Mr sofclton, Id m in and^ 

tfaefr dote or cUn at Mdi ikn aM pl« MihMI 
U rmIIM ta Bdi iiakq.orhfrbnh 0^ ilm 
«UI M tXbM fn» the benefit of any MsrfettM 


NOTICE TO COMPANY OF 
APPOINTMENT OF 

JOINT ADMINISTRATIVE RECEIVERS 
PURSUANT TO SECTION 46UXa) 

OF THE INSOLVENCY ACT 1986 

Convany Nwibor. 81434* 

ALFXAimrB ESPLEM A CO LCMTTQ 


Wt Cyr8 YMtcr Maid and Itabort Edwvri Catmor 
Cook of St Jam's Hook. Omriotu Stmt, 
ttMcfantB- Ml 4DZ hendv gift ootlce that an the 
23rt rhv of Odttxr 1987 w were a p y o hda il fotat 
uM M n OH nwehets of the store namtd 
conrpwy <8 Uoyth BaMr Qh ante ttw term of a 
iMBttM (Mad 301b Deeenfrer 1981 gMng (be 
boMmanted aad BoMog dopoe ottr the ancts of 

** WWI c9mL WALTER NIELD 

ROBERT EDWARD CAUNCE COOK 


SWITZERLAND 
FINANCE AND 
. INVESTMENT 

The Financial Tima 
proposes lo jpubbih data 
■mveyon 

TMcadsy lSlhDocenitw 1987 

iw flrrttwf 


Gmaer Breitling on 
022/311604 


IS. roe da l 
1201 Genera 
or 

Patricia Sorridge 

Bracken House 
- IQ f attnrm S r r w r 

LONDON EC4P4BY 
TeL 01/ 248 8000 ext 3426 

FINANCIAL TIMES 

EUROPES BUSINESS 
NEWSPAPER 


Company Notices 


EUROPEAN ECONOMIC 
COMMUNITY (EEC) 

11% ECU Bonds doe 1993 
Numerical SA 

1) of the series mdafttg ihe 6^250 faotab 
drown by lot and making up the entire 
Ecub^SOJXn maM amount to be 
redeemed on December 14, 1987 

From No. 27781 to 34030 Md 

2) of the series prmtoiafy drawn tv lot and 
rqpajnbfe on December 14, 1966 

From No. 3%«1 to 45890 tod 
Each of these bonds is lepa y atfc at 
EcaLOOO at the offices of the following 

bate 

Bwxjoe Bmeflcs Lambert SJUBank 
BneM LfrMMrt N.V, Brassed Baaove 
Internatlonalt i L u xembo u rg SA, 
L ux e m bo u r g; Spatefcasam SDS, 
Cope nha gen 

BANQUE BRUXELLES LAMBERT SA/ 
SANK BRUSSEL LAMBERT N.Y. 

Find Agent 


CYDSA1A 

nOATINO IMIENOm 
DUE 1 009-1891 

Horn « hsteby mvn m w or 
Jtem « Pedod oommwt cto o W ov e itb tt Dfc 
1M7, ow noon w« bear toHM tt ma 
*• ,P* 0 Virtl par anauos The ifr* 

. £ 'tsrrs* 

MJMOtMtttaaL ( 

0M0H ROYAL *33S LTD. 


Art Galleries 


8Mr KEN8IHGTON AKT1QUSX FAML MM 
Town HM. Hannan sm«l umd* ' » *5 
day aim taiM SuntMr SOt Nownbar. ft -J 
daHy. Final Day 12 -4, TWt 01 SSTOfW; Mg 
mwtodMMnaaday 4th, Ttattarky 5<v, aad 
FHrhqrOdiHowembar} 








I 

- _ . y 


M; ! 


i 


Financial Hipeg Friday November 6 1987 





, *a r s*V 




1^- . • **• l''‘ ; 




What gives Metro - Cammell’s 

Sprinters the edge? 

A 3 MONTH EARLY START AND A 

30 YEAR RUN. 


anagers 


Our Sprinter Diesel Multiple Units always get British Rail off to a 
flying start 

The first of the latest generation of Class 156 high quality cross 
country DMU Sprinters has been completed 5 months ahead of schedule. 

In fact early completion is a crucial part of Metro-Cammell’s main 
contractor policy 

Recent contracts for the Hong Kong Mass Transit, Kowloon-Canton 
‘ Railway and for London Underground all ran early We were months 
ahead of the timetable in all cases. 

What’s more, consistently beating the deadline in no way detracts 
from the high quality of our products and engineering or our ability to 
work to budget and our total customer support. 

And what better proof than the fact that our Class 101 DMU’s 
supplied way back in 1957 are probably the best that British Rail ever had 
and are still going strong . A. 


and are still going strong /\ 

To be a front runner in the international p / y 

rail industry takes rather more than just being 
quick off the mark. 




MEtRO-CAMMELL 

We?re 5n the long term consistency and service business. 


ARTS 


Financial Times Friday November 6 1987 


Arts 

Week 

Pi S iSlm MiTui W.Th 


6 * 7 « B I 9 MO 111 >12 


Music 


LONDON 


BBC Philharmonic Orchestra con- 
dnci<-J by Luciano Berio with Sa- 
brrr M-.-yer. clarinet, and Katia and 
Marielle Labvque. pianos. Haydn, 
Branns and Be no Barbican Hall 
i Mr-r.j ($389691} 

Melon Quartet. Beethoven. Wigmoro 
Hail f Mon j 1 935 2141) 

City of London StaToni* conducted 
by Ki'ihad Hick ox with Fou Ts'ong, 

B ;aiio Handel and Mozart. Barbican 
ail t'Wedj. 

Melos Quartet. Beethoven. Wigmore 
Hall >‘W~d) 

London Symphony Orchestra con- 
duct-! by Claudio Abbado with Al- 
->.is U'ciss^nNug, piano. Ravel and 
Prokofiev Barbican Hall (Thur'k 


PARIS 

Pasts Barchaladxe recital, Ljumila 
Ivanova, piano: Rachmaninov, Mus- 
sorgsky i\lon). Theatre de I'Aihe- 
nee (4?43672T). 

Coloune Choir sad Orchestra con- 
ducted by Michel Corbot Mendels- 
sohn s Elijah (Mon). Trinity Church 
(42334444). 

Ensemble Orchestral de Puis with 

Anne Queffelec. Piano: Ravel Rous- 
sel. Chausson (Tue) Salle Gaveau 
(45633030). 

Elisabeth Brassoor Cbolr performs 
Brahms' German Requiem with Qr- 
chestre Francais d Oratorio con- 
duaed bv Jean Pierre Lore (Tue 
9 30 PM. Ved 530PM) Saint Roch 
Church (43619328). 

Elisabeth Chojnarlta, Harpsichord: 
Bach. Horowitz. Ligeti, Xenakis 
(Tue. Thur 8 30 PM} Theatre de la 
vdle (42742277). 

Orchestra de Paris conducted by 
Daniel Barenboim. Itzhak Perlman, 
violin: Mendelssohn. Scriabin (Wed. 
Thur). Salle Pleye! (45630796). 

Orchestra National de France con- 
ducted by Neville Marriner Cheru- 
bini. Mozart, Haydn (Thur). The- 
atre des Champs Elysees (47203637) 

USSR Stare Symphony Orchestra 
conducted by Yevgenni Svetlanov, 
Lou bo v Timofeyeva, piano: Rach- 
maninov, Glazunov, Tchaikovsky 
(Mon). TMP Chateiet (42334444). 


NETHERLANDS 

Concertubonw Orchestra conduct- 
ed by Gerd Albrecht, with Beatrice 
Hildas, soprano. Hindemith. Berg. 


Henze (Thur). Amsterdam. Concert- 

gebouw. (71 SJ45) 

The Colorado Quartet performs 
Haydn. Lade im an. Dvorak (Tue). 
The Touring Ensemble under Chris- 
tian Bor: Mozart, Shostakovich. 
Dvorak (Thur). Utrecht, VYeden- 
buig. Recital Kail (31 4544) 
Netherlands Chamber Orchestra con- 
ducted by Gustav Leonhard: Neth- 
erlands Chamber Choir, with Bob 
van Asrwren. harpsichord: Swee- 
iinck, Huygens and their contempo- 
raries (Thur). Rotterdam, Doefen. 
Redtal Hall (413 24 90} 

NEW YORK 

London Philharmonic Klaus Ten- 
nstedt conducting. Mozart. Mahler 
(Tue): Vladimir Fei toman piano re- 
cital. First public appearance in the 
US since leaving the Soviet Union. 
Carnegie Hall* 247 7800) 

New York Philharmonic. Erich 
Leinadorf conducting. Schubert. 
Messiaen. Schumann (wed} Lome 
Munroe 'cello. Britten, Walton. De- 


no with Choral Arts Society ol 
Washington directed by Norman 
Scribner. All Brahms programme 
(Tue); Lorin Maazel conducting. All ' 
Hindemith progra mme (Thur). 
Kennedy Getter (254 3776) 

CHICAGO 


Leonard Slatkin conducting. Wil- 
liam Powers baritone with Chicago 
Svrophonv Chorus Barber. Hanson, 
W Schuman (Thur). (485 Bill). 


Lincoln Center (Avery Fisher Hall) 
(874 3424) 

Waverly Consort (Alice Tully} Lul- 
ly. Lambert, Delalande. Couperin 
(Thur) Lincoln Center (362 1911} 


WASHINGTON 

National S ymph o ny (Concert Hall} 
Rafael Fruhbeck de Burgos con- 
ducting, Janice Taylor mezzo sopra- 


New Japan Phnhanaoedc Orches- 
tra conducted by Saji Ozawa.- Veri 
di. Ravel Tokyo Bunks Kaftan 
(Mon) (499 531). 

Orchestra de la Suisse Eonande, 

conducted by Annin Jordan, with 
Martha Argerich. piano. All Ravel 
programme. Hitomi Memorial Hail. 
Showa Women's College, Sartken- 

chestxm, conductor. Hartmut Haen- 
chen, with Yukino Fuirwaxa, piano 
Mozart. Chopin. Beethoven. Kan i 
Hoken Hall. U Port. Gotanda. (Tue) 
(237 9990} 

Tokyo Metropolitan Symphony Or- 
chestra conducted by Adam Fisch- 
er, piano. Pascal Devpyon. Mozart. 
Likn. Tokyo Bunks Kaiksn. (Wed) 
(822 0727} 1 

Gidon KmnCT, violin with Martha 
Argerich, piano. Schumann. Banok, 
Franck, Sur.tory HaD. (Wed) (573 
3588} 


Opera and ballet 
PAMS 

London Festival Bailee at the The- 
atre des Champs Elysees (4730363) 
Houston Grand Opera with Sber- 
win M. Goldman, Porgy and Bess at 
the TMP Chalet (42334444} 

WEST GERMANY 


kova Cap. . Tat ana Troyanoe. Hose 
van Dim and Peter Dvorsky. Pique 
Dame in Rudolf Noelte's production 
and Eine Florentinische Tragodie/ 
Gianni Schicchi (20761} 

Stnttgntt Wumembergishes Staat- 
stheatre. Die Soldaten has Tins in- 
terpretations by Nancy Shade, Mila- 
sro Vargas, Grace Hoffman. Guy 
Repaid and Kalus Htrta Die Ent- 
fuhrung a us dem SenuJ stare Kris- 
tina Lola, yasuko Kazaki. Uwe Hefl- 
in an n and Helmut Berger Tuna. 
(20321} 


produced by Franz Marijnen will 
nave its premiere this week, the 
cast, including Paolo Montarsoto, 
Urban Malm berg. Hellen Kwon and 
Kurt Strait. Zar und Ziramermann, 
is also in the repertory and The 
Nutcracker, choreographed by John 
Neumeier. is revived with. Jessica 
Funt, Jeffrey Kirk and Stefanie 
Arndt (351151} 

Frankfurt Opera. Cosi fan tutte, pro- 
duced by Graham Vick and con- 
ducted by Gary Benin!. In the main 
parts are Margaret Marshall, Diana 
Montague, Olaf Bar, Hans Peter 
Bloch wife. Tom Krause and Mitsu- 
ko Shirai. Gluck's rarely played 
lphigenie in Auris and Iphigenie 
auf Taurts round off the pro- 


gramme- (25821} 
Cologne Opera. I 


<ologne Opera Die Meistersinger 
von Numbers, with Nadine-Se- 
cunde, Theo Adam. Matthias HoUe 
and Robert Hosfaivy, Also a Festi- 
val Of Voices with Gabriels Benae- 


Tarln Teatro Regio. Siegfried, sung in 
German, conducted by Zoltan Pesko 
and directed by Gianfranco de Bo- 
9io Scenery by Attila Kovecs and 
costumes by Sancuzza CalL In the 
cast are Boris Bakov, Gerd Sren- 
neis, Graham Clark, Heinz Klaus 
Erker and Otrun Wenkei. (548.000} 

Trieste Teatro Comunale. Carmen, 
sung in French, with Alteouise de 
Vaughn in the title role. Conducted 
by Hubert Soudan t. Mascagni's L'A- 
mico Fritz, conducted by Evelino 
Pido and directed by Mario Zanotto. 
(631948} 

. NETHERLANDS 

Eindhoven Schoowbura The Intro- 
dans company in Ed Wubbe's new 
choreography of Carolina Burana 
(Wed} (111122} 

Amsterdam Muriektheater. Donizet- 
ti's Don Pasquale performed by the 


Netherlands Opera directed by Ren- 
ate Ackerman n. Bruno CampaneUa 
conducting the Netherlands Phil- 
harmonic, with Henk Smit, Chris- 
tine Barbaux, William Shim ell and 
Raul Gimenea (Wed} (255 455} 

NEW YORK 

Metropolitan Opm (Opera House! 
The premiere of Fabrcdo Melaoos 
new production of II Trovatore 
highlights the week. Richard Ban- 
ynge conducts, with Joan Suther- 
land, Fiorenza Cossotto and Luci- 
ano Pavarotti- Continuing are 
Franco Zeffirelli's production of. La 
Boheme conducted by Julius Rudd 
with Roberta Alexander and Brian 
Schexn&yder, Otto Schenk's pro- 
duction of Die Wallrure, onducted 
by James Levin with HUdegard 
Behrens, Timothy Jenkins and 
Hans Sotin; and Franco Zeffirelli's 
production of Tosca, conducted by 
Christian Badea with Eva Marion, 
Sherrill MHnes and Italo Tajo. Lin- 
coln Center (362 5000). 

New York City Opera. The week 
features' Jock Homs's production of 
The Student Prince conducted by 
Paul Oemignani, with Leigh Muttra, 
Dominic Cossa and Jon Garrison in 
the title role. The final production 
of the season starts, a double bill of 
Mozart’s The Goose of Cairo and 
Oliver Knussen's Where the Wild 
Things Are. (870 5670} 

JofTrey Ballet (City Center). The 
month long schedule continues 


with three premieres, including a 
Robert Joffrey Nutcracker, Nijin- 
sky's Le Sacr? de Prifttemps and 
Three Preludes by Ben Stevenson 
set to Rachmaninoff, along with 
Frederick Ashton's La FilTe Mai 
Gardee and nearly two dozen reper- 
tory favourites. 55th SL east of 7th 
Av. (847 6850} 

Chinese Festival of Song and 
Dance (Joyce). Troop of 40 aero* 
bats, musicians and dancers do 
their stuff, including spinning 
bowls of water, horse bell dance 
and juggling with feet. 17$ 3th Av 
at iSd-TSt. (242 0800) 

WASHINGTON 

Washington Opera (Opera House} 
The 32nd season opens with Romeo 
et Juliette conducted by Cal Ste- 
wart Kellogg, featuring Angela Ma- 
ria Bias! aura Neil Wilson in the t itle 
roles. Kennedy Center (254 3770). 

TOKYO 

Deutsche Oper Berlin, director Gocz 
Friedrich, orchestra conducted by 
Jesus Lopez Co bos. Die Walkure 
(Tue} Siegfried (Thur). Soloists in- 
clude. Catarina Ligengza, Julia Var- 
ady, Rene Kollo, Don McIntyre, 
John Dobson. Tokyo Bunka Kaftan 
(725 8888). 


Continued on page 25 


Theatre 

LONDON 

Separation i Hampstead} Powerful 
sequel to Duet For One by Tom 
Kcmpinski using that play as fur- 
nr.ure in ih«? transatlantic love sto- 
ry of a crippled actress and over- 
weight agoraphobic playwright. 
Pa - , id Suchet and Saskia Reeves 
a:ve all in Michael Attenborough's 
production (722 9301 ) 

The Rover (Mermaid) Jeremy Irons 
roisters into town in the RSC's 
Swan production by John Barton of 
Aphra Behn's rollicking comedy. 
Plays m repertoire with the Cher- 
nobyl play. Sarcophagus, an ur- 
gent but clumsily crafted hospital 
drama set in a terminal radiation 
clinic as the first victims of the 
disaster are wheeled in.(236 5568/ 
638 8891). 

A Man For All Seasons(Sa- 

coyirCharlton Heston begs no fa- 
vourable comparison with Paul 
Scofield as Sir Thomas More in a 
leaden production of a play best 
left to amateurs and schoolchil- 
dren (838 8868} 

Antony and Cleopatra (Olivier} Pe- 
ter Hail's best production for the 
National Theatre he leaves in 1988 
brings this great, but notoriously 
difficult play to thrilling life, with 
Judi fiench and Anthony Hopkins 
as battle-scarred lovers on the brink 
of old age. Dench is angry, witty 
and ultimately moving. (928 2252) 

The Phantom or the Opera (Her 
Majesty's): Spectacular but emo- 
tionally nutritional new musical bv 
Andrew Lloyd Webber emphasising 
the romance in Latoux's 1911 nov- 
el. Happens in a wonderful Paris 
Opera ambience designed by Maria 
Bjorn son. Dave Willetts has suc- 
ceeded Michael Crawford as the 
Phantom (839 2C44. CC379 6131/ 
340 7309) 

The Balcony (Barbican} Sadly dated 
and heavy-handed opening to the 
SSC'i Genet retrospective, not help- 
ing to fight suspicions that the 


RSC. certainly in London, is 
stretched wav beyond its creative 
capacities. Terry Hands directs, 
Farrah's set looks like a cheap pink 
brothel and the actors, a dull lot, 
dump around on high boots in big 
bulging costumes (623 8795) 

Follies l Shaftesbury): Stunning re- 
vival. directed by Mike Ockrent and 
designed by Maria Bjomson, of Son- 
dheim's 1971 musical in which poi- 
soned marriages nearly undermine 
an old burlesque reunion in a 
doomed theatre. Four new songs, 
improved book by James Goldman. 
Cast led bv Dolores Gray, Julia 
McKenzie. Diana Riga. Daniel Mas- 
sey. All good (379 5399) 

Melon (Hay market} Alan Bates pre- 
dictably good in new Simon Gray, 
clumsily directed by Christopher 
Morahan. about a jealous publisher 
viewed in flashback from a psychi- 
atric ward after a breakdown. 
Menopausal muttenngs. not vintage 
Gray (930 9832) 

Serious Money (Wyndham's} Trans- 
fer from Royal Court of Caryl Chur- 
chill's slick City comedy for cham- 
pagne-swilling yuopies: how the 
Big Bang led to class tumult and 
barrow-boy dealings on the Stock 
Exchange Hot and livid, but new 
cast deemed less good (£36 3028, CC 
379 6585) 

A Small Family Bostawaa (Olivier} 
Brilliant new Alan Ayckbourn play 
about Britain on the fiddle in 
greedy times, selling out to foreign- 
ers and keeping it simultaneously 
In the family. A comedy thriller on 
the large scale. (92S 2253} 

NEW YORK 

Fence* (46th Street): August WUson 
hit a home-run. this year's Pulitzer 
Prize, with James Earle Jones tak- 
ing the powerful lead role or an old 
baseball player raising a family in 
an industrial city in the 1950s. try- 
ing to improve their lot but dogged 
by his own failings. (221-1211} 

Cats (Winter Carden} Still a sellout. 


Trevor Nunn's production of T.S. 
Eliot's children' poetry set to 
trendy music is visually startling 
and choreograph ically feline, but 
classic only in the sense of a rather 
staid and over-blown idea of theat- 
ricality. (239 6302} 

42nd Street (Majestic} An immodest 
celebration of the heyday of Broad- 
way in the 1830s incorporates gems 
from the original film like Shuffle 
Off To Buffalo with the appropri- 


Off To Buffalo with the appropri- 
ately brash and leggy hoofing by a 
l arse chorus line, w, 9020} 

A Cnorns Use (Shubert} The lon- 
gest running musical ever in Amer- 
ica has not only supported Joseph 
Papp's Public Theater for eight 
years but also updated the musical 
genre with its backstage story in 
which the songs are used as audi- 
tions rather than emotions. (239 
63Xi) 

La Cage aax Folk* (Palace} With 
some tuneful Jerry Homan songs. 
Harvey Fierstein s adaptation of 
the French film manages barely to 
capture the feel of the sweet and 
hilarious original between high- 
ki eking and gaudy chorus numbers. 
(757 2636) 

I'm Not Rapp* port (Booth} The 
Tony's best play of 1986 won on 
the strength of its work -of- mouth 
popularity Tor the two oldsters on 
Central Park benches who bicker 
uproariously about life past, pres- 
ent and future, with a funny plot to 
match. (239 6200) 

Lea Miserable* ('Broadway} led by 
Coim Wilkinson repeating his West 
End role as Jean V a] jean, the mag- 
nificent spectacle of Victor Hugos 
majestic sweep of history and pa- 
thos brings to Broadway lessons in 
pageantry and drama, if not strict 
adherence to its original source. 
(239 6200) 

Starlight Express (Gershwin} 
Those who saw the original at the 
Victoria in London will barely re- 
cognise its American incarnation: 
the skaters do not have to go round 
the whole theatre but do get good 


exercise in the spruced-up stage 
with new bridge* and American 
scenery to distract from the hack- 
neyed pop music and trumped-up 
silly plot (5S6 6510) 

Me *ad My Girl (Marquis} Even if 
the plot turns on ironic mimicry of 
Pygmalion, this is no classic, with 
forgettable songs and (toted leaden- 
ness in a stage full of characters; 
but it has proved to be a durable 
Broadway hit with its marvellous 
lead role for an agile, engaging and 
deft actor preferably British. (947 
0033} 

The HUhabharat* (BAM Majestic} 
Peter Brook’s nine-hour Interpreta- 
tion of the world’s longest poem 
inspired the refurbishment of an 
old Brooklyn vaudeville theatre to 
accommodate it for a three-month 
stay as part of the Brooklyn Acade- 
my of Music's New Wave Festival. 
Ends Jan 3 (947 5550) 

Joe Turner * Come mad Gone 
(Kreeger /Arena} Tony Award 
winning playwright August Wilson 
turns in this play to a rooming 
house at the turn of the century 
where black people conjure up 
spins that connect them to their 
heritage. Ends Nov 22 (488 3300) 

All the King** Me* (Aim} Adrian 
Hall's adaptation of the Robert 
Penn Warren novel explores the as- 
sassination of a demagogue during 
the Depression with music by 
Randy Newman., Ends Nov 22. (488 
3300) 

TOKYO 

Kabulti (KabuM-za} The matinee 
plays are best. Excellent informa- 
tive English earphone commentary 
and detailed programme notes. 
Newcomers may find one play 
enough but the lira -timer's one-act 
ucket on the fourth floor is not 
good value. Sigh tiines are poor and 
there is no English earphone guide. 
Instead, purchase a third floor tick- 
et. Kabuki-za. near Ginza (541 
3131} 


APPOINTMENTS 

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For further Information 

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Elizabeth Rowan 
ext 3456 









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5NJ GROUP 

The people, the skill, the equipment 








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Financial Times Friday November 6. 1987 



and 


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24 


THE PROPERTY MARKET 


THREE POSSIBLE FUTURES 
for Britain's high streets, trou- 
bled by the spate of out and 
edge-of-town retail develop- 
ment proposals, were put to the 
people who finance, build and 
occupy them at the first annual 
conference of the British Coun- 
cil of Shopping Centres, in 
Bournemouth this week. 

In a keynote address. The 
Health of the High Street,’ Pro- 
fessor John Dawson of the Insti- 
tute for Retail Studies at the 
University of Stirling said that 
the first scenario would mean a 
high street given over to leisure 
shopping, losing some of its 

present variety. 

Professor Dawson defined lei- 
sure shopping as a market for 
non-essential products and ser- 
vices. There would be greater 
emphasis on designing a leisure 
environment in-store and en- 
couraging shoppers to stay lon- 
ger. Public agencies would re- 
furbish the common/public 
areas of the high street, exclude 
traffic, redesign street furniture 
and the costs of this would pre- 
sumably be borne by local gov- 
ernment. 

The second option was a 
much greater presence of ser- 
vice retailing, tbe services be- 
ing listed as: personal; medical; 
financial; leisure/entertain- 
ment; household; business; and 
social This had about as much 
appeal at a BCSC conference as 
the proverbial lead balloon; 
council members have made no 
secret of their disquiet at the 
invasion of high street prime lo- 
cations by the very building so- 
cieties and banks which Profes- 
sor Dawson was talking about 

His third scenario, however, 
was politically much more ac- 
ceptable. He suggested an envi- 
ronment ’strategically managed 
in comparable fashion to a 
shopping centre”, an idea which 


High noon in 
high streets 


coincides with the BC$C*s own 
proposal for the creation of 
town-centre managers. 

Implementation,- he said, 
would require the Involvement 
of local government, retailers 
and the financial institutions 
which have invested heavily in 
high street property, including 
shopping centres. "At the end of 
the day,* he concluded. The peo- 

Populatfon changes 


Major 

% rate of change 

urban areas 

(Decennial) 


1971-81 

1380-85 

GB 

0.5 

1.0 

Greater London 

-9.9 

-2.4 

West Midlands 

-5.2 

-3 SL 

Greater Manchester 

-4.9 

-3.4 

Merseyside 

-8.7 

-6.6 

South Yorkshire 

-1.4 

-2.0 

West Yorkshire 

-1.5 

-1.6 

Tyne & Wear 

-5.7 

-3.8 

Strethcfyde 

-6.6 

-6£ 


Sauna: OPCS 


pie who own the high street 
have the most to gain or lose by 
its vitality or otherwise.* 

In recent years, the major 
threat to the high street has 
been perceived as the persis- 
tent and increasing trend for re- 
tailers to locate in out of town 
or edge of town locations - ex- 
emplified last year by the open- 


ing of Cameron Hall’s £20Qm., 
2m sq ft MetroCentre in Gatesh- 
ead's Enterprise Zone. 

It was developments like 
these which contributed to tbe 
deurbanisation of the US and 
the "hole in tbe doughnut” syn- 
drome, the phrase coined to de- 
scribe the vacuum which devel- 
oped in America’s town and city 
centres In the 1960s and 1970s as 
householders, jobs and retail- 
ers followed the freeways to the. 
edge of town, leaving the cen- 
tres to dilapidation and decay. 

Now, town centres are show- 
ing tbe will to meet the threat 
head-on. At the same time, an- 
other keynote address at Bour- 
nemouth suggested that the 
British problem may prove to 
be less acute than the one 
which the' Americans have ex- 
perienced. 

The Planning Implications of 
Out of Town Shopping and 
American Experience” were ex- 
amined by Professor Peter Hall, 
of the Universities of Reading 
and Berkeley, California, and 
Michael Breheny, a lecturer at 
Reading. 

"For the past 20 years,” said 
Professor Hall, The message for 
retailing has been ’out, out, onf . 
The general assumption in 
Britain is that this profound 
trend towards deconcentration 
of population and jobs will con- 
tinue and that a new decentral- 


ised urban structure is inevita- 
ble. However, , we are not so 
sure.” 

Looking at America, he noted 
that, by the 1970s, some analysts 
were reporting that the move to 
the suburbs was being suc- 
ceeded by deurbanisation, or 
the decline of entire metropoli- 
tan areas. 1%e geographer Dan- 
iel Vining bailed this as a clean 
break from the past: a reversal 
of the two-hundred-year -trend 
from farm to city". 

■Now,” Professor Hall ob- 
served, The analysts are con- 
fused. For the latest data indi- 
cate yet another reversal. 
Baring the early 1980s, not only 
did the metropolitan areas 
again resume their growth^ in- 
creasing much more rapidly 
t han the non-metropolitan resi- 
dues: in addition, for the first 
in decades, growth in the 
central cities again picked up”. 

Hall and Breheny concluded 
that for the time being, the 
long-continued process of out- 
ward deconcentration of Ameri- 
ca’s urban areas seemed to be 
coming to an end. "People, jobs 
and retailing appear to be in 
some sort of equilibrium,” they 
said. 

"Since Britain was the first 
European country to follow the 
American trends on any notice- 
able scale", they .added, "We 
might hazard a guess that it will 
a lso be the first to witness the 
revival of the central city.” 

In certain areas, it seems, the 
net loss of population has actu- 
ally been stemmed. "In the last 
three years Greater London, af- 
ter almost three decades of con- 
tinuous population loss, has 
witnessed a small growth in its 
population, ' noted Mr Breheny. 

In the US, as Hall and Bre- 
heny's chart demonstrates, the 
growth in retail fioorspace is 
following the trend of decen- 




Population decentralisation' 



Financial Times Friday November 6 1987 

BY WILLIAM COCHRANE 

Darkness on the 
edge of town 


‘THE OUT-OF-TOWN thnttthas 
its little subtleties. Politicians 
and other pundits worry about 
million square feet m e gac enp es 
while a tea sensitive Earn of re- 
tail development, retail wwe- 
h outing, has been galloping 


) « Comparison of changes &reta3 provlsiOTd^rges 





txalisation in its downward 
curve. In Britain, the fioorspace 
line has gone wild since about 
1983 

It is also planned at a time of 
slow population growth in outer 
areas and some population 
growth Jkn the cities. "Develop-' 
ers, retailers and planners,” 
concluded Breheny, Thus have 


the opportunity to take stock." 
They might also be persuaded 
to take notice of central govern- 
ment which has set its free 
a gains t green belt development, 
does not want proposals for 
wide open spaces ana is clearly 
only willing to compromise 
where deeply disadvantaged lo- 
cations - i«ke an ash tip in Ga- 
teshead- are involved. 


Stuart Hampsott, director of re- 
search and expansion at the 
John Lewis Partnership, said at 
Bournemouth that there w» ap- 
proximately 3m sq ft of retail 
inrehonsfag in the London area 
with another 7m in the south 
east of En gfand making 10m in 
Into. 

*It looks as if another l«m sq a 
is now due to come on to the mar- 
ket,* he said. That's what the 
town centre market ha * to c ope 
with withoat any "third wave" of 
ont-of-tonm regional shopping 
centres coming along.” 

So town centres need tore- 
spond; some of them, like New- 
castle with Capco’s thriving El- 
don Square centre, are doing so 
already; in the coarse of the con- 
ference, BCSC put up a way for 
pw to do so more effectively. 

Jarred, senior partner of 
Hillier Parker and president of 
BCSC, introduced a policy docu- 
ment which said that town cen- 
tre managers should be appoint- 

The new manager would co-or- 
dinate public works; develop a 
"spirit of place* and promote the M & S, and the John Lewis Part- 
town. He or she wo old deal with nerehip, arc both exploring out- 
police, traffic management, of- town retailing despite their 
chambers of trade, public trees- heavy Investment in town centre 
port and planning control, high- properties. 


ways, landscape, street lighting 

and cleansing. 

The idea is set new. la Japan, 
according to frofesoor Damon, 
the improvement of "stopping 

streets' w as encettrnged, and 
part financed by gover n ment . 

in the US. the Downtown Re- 
search and Development Center 
in New York waa arguing too a 
managed approach to Vain 
Street in tbe early WTO* this led 
to town by town approaches later 
in the decade. 

There was a jingoistic re- 
sponse to some of tills, archi- 
tects. agents and others profess- 
ing to see no reason why the 
British should follow the Ameri- 
can, or an y other foreign pattern. 

However the foci Is that CAL- 
CS, the Centre for Advanced 
Land Use Studies at the College 
of Estate Management, Reading, 
which organised this confer- 
ence; also organises exhaustive 
shopping centre trips to. Inter al- 
ia. the US and Canada 

Tim threat to UK centres is not 
simply external. The BCSC Pub- 
lic ACCtirs Committee, under the 
chairmanship of Mr Peter Sprid- 
ddl, estates director of Marks & 
Spencer, says that many tradi- 
tional British High Streets me 
drab, squalid, congested, wet and 
draughty. 

It is worth remembering that 


unique 

WfcstEnd 

opening 



One of the./»i£s/iiew office developments in Central London has 
now opened its doors. 

77 SHAFTESBURY AVENUE stands on the northern side of 
Shaftesbury Avenue and covers the entire frontage between 
Dean Street and Frith Street 

An Meal location for easy access to the City, Mayfair, the shops 
of Covent Garden and virtually every iruyor British Rail and 
Underground link 

Spread over five floors it offers approximately 50,000 square 





Hillier 




feet of thoughtfully designed and beautifully appointed office 
space. 

Tbe development is fully air-conditioned and each floor has the 
flexibility to be laid out as private offices or open plan. 

77 SHAFTESBURY AVENUE'S unique position is complimented 
by its unique decor. 

A beautiful marble lined entrance hall leads to a modem central 
atrium complete with glass enclosed lift and a cascading water- 
fall feature. 

To view tMssitperbdevelopmentpiease contact Roger N ewton or 
Nicholas Theobald at Hillier Parker, the sole agents, to arrange an 
appointment 



01-6297666 

77 Grasanwr Shvct 
Urt- WIABT 




A DEVELOPMENT BY SPEYHAWK LAND A ESTATES LTD. tN CONJUNCTION WITS KLEJTJW08T CBIEVESON INVESTMENT MANAGEMENT UD. 


W A 

SEVEN • 


N 

ACRE 


T E 

SITE 


D 

FOR 







To construct distribution warehouse. 

Good access to toad network essential. 

Agents retained if appropriate. 

IF YOU CAN HELP PLEASE CONTACT 
John Cullis, Gavin Simpson or James Palmer 

at the Sole Agents 




CtartendSM^on 
Ab IndvndfW Brat of prap* 

BaSo-HciMS. OUScKoalUse 
LafedeHa. London EC4M7LR 





Ob iMrocitaM Cron 

Gniittr JfaaeiwNer RwWuarj Body 
roc SALE 

Two nodrn high yielding Industrial 
Investments clone to Manchester City 
Centre. Total ia»ne approximately 
twm per exclmlve. Available 

hdlfMeaUy w as cue lot For farther 
information contact MacPwaM Dim, 
Crass Snildlnii. 1 Besth Street, 
Mwh..mr SB 4DU Teh M14B3 MSS or 
ftn. beaks A Partners, M Cress Street, 
n^--— ■— M2 7 Alt TM: 001-833 MM. 

Serviced Office 

5 mins, from Liverpool St. 

55U sq ft 
to let 

STBEITONS 

91-375 1891 

5TUWMG PENTHOUSE OFFICES 

2.000 aq ft available hnmafflatafr 
Previously unoccupied fi/C office - 
building. 

Overlooking Thamea and Chefans 

nfiTblnblSbo 

Skillionplc 


GUILD HOUSE 
36-38 UNCHURCH STREET 
EC3 

BUSMESS CENTRE 
01429 5252 

Prestigious fully serviced small 
offices and suites to let from 90- 
1,700 sq fL Reuters, Tuple and 
Tcterate lines avallrtle on request 
IMMEDIATE OCCUPATION 

for details 


LOCAL LONDON CROUP PLC 


BEMSONSRBJ) OLD TOWN 
(RM0/M28) 

PERIOD PROPCRVY N THE VBtV 
BEST LOCATION 
WRh waded south feeing garden 


U pNWlfe 3782aq.fi. MtefWfr 
thm OmCE ACCOMMODATION 
oon bogs prioto cor part. Meal tar 


How n&t ft for Ate JBSS9. 
ffotaTtm. 

jo Canon ag f, amp *sy 


Tha announcement appears as a manor of record only. 


BURFORD GROUP PLC 
£20,500,000 

Transferable Loan Facility 

For the acquisition of a portfolio of 
industrial, retail and office properties 

Arranged and Managed by 

Guinness Mahon & Co. Limited 


Participants: 

Bank of America NT & SA 
Credit du Nord, London Branch 
Credit Lyonnais 
Guinness Mahon & Co. Limited 
United Bank of Kuwait pic 

Agent: 

Guinness Mahon & Co. Limited 


[fi 


October, 1987 


LONDON W.l 


New Air-Conditioned Office 
Building 

35,000 sq. ft. approx, 
with Car Parking 

Freehold for Sale 

With Vacant Possession 


Principals or Retained Agents only 
Write Box No. T6570 Financial Times, 
10 Cannon Street, London, EC4P 4BY 



HARLEY STREET 

LONDON W1 

PRESTIGE OFFICE BUILDING 

Long Leasehold interest 

FOR SALE 4200 


% CONTACT UFM32 

EWIS & TUCKER^s 

. Tefc 01-629 5It)L Fax: 01-493 3781 


NORFOLK 


.Jv 


ST JAMES’S SQUARE SW1 

A MAJOR FREEHOLD 
OFFICE INVESTMENT 
FOR SALE 

Contact:Mazk Creedy Smith 

JkHillier 

Parker 

01-629 7666 


77 Gamvoor Snwtlatoaa VIA MT 


ON THE INSTRUCTIONS OP 
THE EDINBURGH INVESTMENT TRUST PUC 


For Sale 


3 Charlotte Square Llpinburgh 
The Jewel in The Crown of Edinburgh’s Georgian 
New Town and Scotland’s Most Prestigious 
Office Address 


NET OFFICE AREAS: 


ecsotftawo 
Gmnl(2afficM> 

FMC4amaw> 

Second C4 afffOMS) 
Third (3 offices) 


Net Office Atm 
1-<*23 
SIS 
1,190 
87S 
797 

5.102*0. ft. 


It hi cm ak fredtHs* there t» scope llor h wee loathe net office 
CAR BARK Thers w ro s e v e mtea s cm iiielil n OMaeCealntherT 
VIEWING B yo o manun tm HlUl wip it 


Montagu 
Evans ~ 


CHARTERED SURVEYORS 

47 Metvflte Street, EDINBURGH EH37I-ll_1bl:G31-225954f 


SOHO SQUARE, W.l. 

M41 sq. ft 

FREEHOLD OFFICE BUILDING 
FOR SALE 

Fimv.P. EDWARD CHARLES 
& PARTNERS W1 
CHARTERED SURVEYORS 
01 935 2811 


immediate 

Possession 


OFFICES TO LET 
5,000 Sq Ft 
ELDON STREET EC2 
IMMEDIATE V.P. 
PHONE 01-248 32 00 


PANNELL (WAREHOUSING) LTD 


WAREHOUSE PRBBSESfiTORAGE SPACE CURRBGIY AVAEABIE 

. MORTH LONDON (15^)00 Sqff) . 
HEATHROW (OQ^OO sq «Q 

SHOfTOMEDEJM TERM CONTRACTS 
HANDUNG FACItJHES 

Tefe (0703) 872558 or (0763) 683878 TsfcK! 474*7 





Financial Times Friday November 6 1987 


ARTS 


25 


Cinema/Nigel Andrews 


r .* *1-. 11 tf A 
*’ «r*v 


Another tour-de-Forster 


*=i utV 

-rr-; 


__ : ana hypocrisies. The rears are 

jpaunob (15) Cannon Shaftesbu- those of the lover themselves, the 
iy Avenue .‘ 'bewilderments are those of their. 

Jmxmjm (PG) Cannons Hay- family (Billie Whitefew as Maur- 
_ Market and Oiford Street Ice’s Mum, squeaking in shock at 
Lets Hope It’s A Gtd (15) Re- the fim sight of a snatched kiss 

between Maurice awl CEve) and 
05)' Cannon' the hypocrisies are those of doc- 
Tottenham Court Road and tors, moralists aad “experts. 


The fears are outlines were first drawn 70 years 
ago. 


Ritzy Brixton 


Denholm Elliott curb's memora- 


-V. 

1 -* --** -r- ^ 

i H » i "* Uc , 4 
- . J l* 1. 

.* ^ 

v * l; 

■ *;^8s 

. - •■ . . hjrw • 

. ‘ ' '•> ;a-C,A 

- i r . "*^1 


Didn't Yon Kill My Brother bly unctuous lip as Dr Barry, the 


and Soda 


J™ 1 i°Uy Livea Next family medico.and Ben Kingsley 
Door (15) Ganxton Baker Street deploys a basilisk stare and a sti- 
letto American accent as the Har- 
ley Street shrink Maurice is belat- 
edly packed off to.' (“Take 
exercise, " is his immortal advice, 
**80011 around with a gun"). 
Scrupulous fidelity to a novel. 


. Maurice shows that "sequeli- 
tis," that dangerous movie virus 

commonly a ssoc i a t ed with Ram- f _ „ 

bos ai^ Rockys, can strike high- and to the trap pin gs of a period, 
brow Hm-makera too. After the are often a recipe for weH-man- 


*'■■••• '**4, 

^ *■ 



olk 


sc 


nSCHOLD 


triumph of their first EJd. Fois- 
ICT adaptation A Roam With A 
View, the director-producer ieam 
of James Ivoiy and Ismail Mer- 
chant, purveyor of fine-bone pe- 
riod pieces to the gentry, have 
decided that one tour-de-Foreter 
deserves another. The novelist's 
J914 roman nuautU about homo- 
sexuality now gets the treatment 
To tans, rem em bering 1 not just 
Room but The Europeans and 
Heat And Dust, treatment is 
incomparable. To the sceptic, the 
Merchant -Ivory style sonuBHnww 
see m s like yuds of sumptuous 
set dressing and high-tone British 
acting in search of a moment of 
cinematic originality. 

Maurice, like A Room With A 
View, is firmly in line with their 
Picture-Book Classics approach 
to movie-making. Not a dress, a 
painting or a table-setting is out 
of place as we . follow Forster's 
title hero (James Wilby) from the 
early frissons of a plazonic nv- 
mance with Cambridge pal Clive 
(Hugh Grant) into, his hard- 
fought adnlt battle, once Clive 
has thrown him over for the con- 
formist joys of marriage, to re- 
cognize and his realise his physi- 
cal desires. 

In the process he and Forster 
(and the faithfully pursuing Ivo- 
ry) take us on a gallop through 
the whole landscape of eariynpen- 
tmy English fears, bewilderments 


nered mifirty. Ivory and co-script- 
writer Kit Hesketh-Harvey pluck 
most of the dialogue verbatim 
from Forster** page and slap it 
straight up on screen. Yet the 
care, wit and controlled passion 
with which the stray’s confronta- 
tions are staged and spoken 
amount to a virtual act of re- 
i magi ning. 

Taking its colours chameleon- 
like from the novel, the film es- 
chews the sunny Arcadian feel of 
A Room With A View. 1st the 
process, some scenes border on 
the solemnly risible, as when cop- 


ing with Forster's daydreams 
1th muddy 


about ga mekeep er s . Wii 
boots and Mummeraet accent. 


the virile young Scudder (Rupert 
Graves) shins up a ladder into 


the master’s bedroom in final red 
and - lo! - m # tii «iH -)m 

ses interlock. - 

-But Ivory's brinkmanship hero 
and throughout is masterly. The 
ro- film has a rep r e sse d and- degaic 


yearning that seems wholly faith- 
ful to the 


the pre-WWI p eriod . ^Only 


a few years earlier, 
had discovered that the love that 
dared not speak its name could 
sternly spell ont the words 
"Reading Gaol"). And newcom- 
ers Wilby and Grant leap the 
h u rdles of period dialogue and 
agonised period periphrasis to 
create character* vivid and recog- 
nizable today, even though their 


The omKnes for th* characters 
in Roxanne were drawn even lon- 
ger ago: in Edmond Rostand's fa- 
mous romantic verse drama, Cyr- 
ano de Bergen i& Now comedian 
Steve Martin, he of the shock- 
white hair im cinder-black eye- 
brows, dons the mighty conk to 
play a modem Cyrano. Small- 
town, large-nosed fire chief 
CJD.Bales (extra homework for 
all those failing to pick up the 
Rostand hint in the initials) Ms 
in love with newly-arrived beauty 
Roxanne (Daryl Hannah). But 
she, alas, looks straight past him - 
in the circumstances a remark- 
able feat of m«»i circumnaviga- 
tion - and for «««»*« young 
fireman Chris (Ride Rossovitch), 
a shy Colossus of limited imdli- 
R gacc, 

Can CJX woo and win tds be- 
loved, despite his nose and the 
intervening Chris? And how 
much more complicated has he 
made matters by offering to do 
Chris’s courtship for h«m - to 
write his letters and even ventril- 
oquise his love speeches as the 
young it» hh WatwU miming nmW 
her balcony? 

Martin's previous comic he- 
roes, in films like The Jerk and 
The Man With Two Brains, have 
tended to scamper around the 
sc r een as if they have one finger 
permanently stock in a light sock- 
et. The eyes blaze like finest 
tungsten while the white hair 
seems to send out smoke signals 
of high-volt distress. In Roxanne 
someone - possibly director Fled 
Schcpnd /of Plenty), or possibly 
'screenwriter Steve Martin ( 
playing Jekyll to his own Hyde)- 
has told the p er f ormer to slow 
down. Or perhaps the nose itself 
told trim? a resplendent org an , de- 
signed by make-up maestro 
Frank Griffin to look as if it has 
been refreshed with copious 
quantitie s of Hemeken and for- 
gotten to say when. 

The result is a spacious, dippy, 
enchanting romantic comedy. Za- 



Hugh Grant and Janes WDby In “Maurice* 


ny improm ptus co-exist with the 
undulating beauties of Washing- 
ton State and Daryl Hannah. One 
moment Mr Martin is swashing a 
verbal or physical buckle with 
those who take his nose in vain: 
(relish the scene in which he 
mints twenty florid nose insults 
to Shame a boorish thug who has 
twitted his nasal extremity). The 
next moment the camera is 


Ercety- 

dad Miss Hannah. Hard would 
the viewer be at heart, in these 
circumstances, who presses home 
the one potential quibble in the 
film. Why exactly, in the world of 
post-Rostand modem mederine; 
does Mr Martin not have a nose 
job? 


Some fo r m of enter 
gery is certainly 


do not want to move from their 
crumbling farmhonse-cum-villa , 
in the country, even though they 
can no longer afford H- ’Mother 
Liv Uflmonn gazes around her 
with rockpooi-blue eyes. Dad 
(Philippe Notrot) is a layabout 
Count with eccentric building 
schemes, Unde Guso (Bertr and 
Blier) is mad, and filling up the 
spare c or ne r s and broom cup- 
boards are such luminaries as 
Catherine Deneuve, Stcfania San- 
Hrrili urn! Giutiuo Gcmnk 
It all resembles an overcrowded 
audition for some pilot soap 
opera: possibly a version of The 
Archers aet in Lombardy. There 
axe a fow brave attempts at char- 
acter-culling - Noiret a killed off 
in car crash and Blier is drag ged 
off to a re tire ment home (unfor- 
tunately he escapes and returns). 
But the film’s witless script, Ba- 
bd-tike east and constant voluble 
stabs at sentiment conquer aH 
bids for pith or cogency. 


from British cinema, both mini- 
budget and both fathered some 
time ago ago by Channel 4. Bet- 
ter late than never is Horace 
Ove's Playing Away, a merrily 
cantionary race parable about 
black-meeu-white, in which a 
team of West Indians fr om Bru- 
ton take on the denizens of a 
twee Suffolk village in a cricket 
Match. Carl Philips wrote the 
script, Ove directs deftly and wit- 


^fietter 


MoniceOPs Let's Hope It's A Girt 
The cast is far too large in this 
rambling co-production comedy 
about a wacky Italian family who 


never than late, on the 
other hand, is the crnnchinely 
unfunny Comic Strip double-bill. 
Didn't You KiU My Brother and 
Mr Jody Lives Next Door. The 
first launches the ballistic Alexei 
Sayle at ns in two roles - as 
Kray-like crime brothers in Lon- 
don's underworld - and watches 
helplessly as both fi*»t* out in 
mid-trajectory. The second is a 
laughless walpurglsnacht of 
■blood, violence, slapstick and Rik 
Mayall, written by the latter and 
Ada Edmondson (on an off day) 
tod directed by Stephen Frenis 


Finally, two delayed nBbiap 


as if a very nasty thing had hap- 
» the 


pened to him on the way to 


• ‘O' 1 - 'rv* 
- i • 4 


Eastern European cinema/Chicago Film Festival 


’ . — 

• 1 *.u 


Ronald Holloway 


Llier 

rker 


J s > ’tM 

■ -r . .nfcat.i: 


If further evidence from the 23rd 
Chicago International mm Festi- 
val (Oct 19 - Nov 8) is to be 
taken at face value, then 1987 
has ; been synonymous with the 
success of East Euroj 
ma. Peter Gardos’s 
Cough (Hungary) was at 
the Golden Hugo by an interna- 
tional jury of peers and just a 
few months before, at the Mon- 
treal World Film Festival, Gar- 


doe was singled ouj by a brace at 
informed critics far the HPRES- 


. _.v ^ 





. . Prrt-j; 


. zi 


.... . 4- « r 



Cl Prize. 

TRerrecognlfifiSf well' de- * 
served. A minor sensation when 
it appeared at-the Bu dap est Fes- 
tival last February, whootrvng 
Cough broke new ground by 
treating for the first time the 
realities of the 1966 Hungarian 
Uprising. Such an artistic ven- 
ture at the Mafilm Studios would 
have been unt h inkabl e a few 
yeanj back. 

The Special Jury Prize at Chi- 
cago was awarded to a Soviet 
entry, also quite in step with 
President Gorbachev’s current 
glasnost policies: Tengiz Abu- 
ladze’s Repentance (Georgian 
Republic). Since this was the 
first box-office test in the United 
States for the multiple Cannes 
er, it must oe rea&ur- 
to the Cannon Group that 
lengthy and aesthetically de- 
manding tele feature has passed 
its first commercial hurdle 'with 
flying colours. And when, much 
the same interest was carried 
over a couple days later to Jerzy 
Domaradzki’s The Great Race 
(Poland! commissioned in 1981, 
one could sense a general all- 
around festival interest in pro- 
vocative Socialist cinema. 

Set in -1952, and providing a 
sardonic . view' or ■’peace races’ 
cults,” The 
iculariy note- 


worthy far gigantic twin portrait 
posters of Stalin and Pdmh-Rus- 
sian party boss Wla dislaw Bierut 
ominously dominating the whole 
affair. Again, the mere fact that 
this film could be presented at 
the 1986 Gdansk Fnm Festival 
-Quid awarded a Silver Lion 
there), followed by a recent na- 
tion-wide Poltel broadcast, is on- 
ly conceivable in the era of pfcxs- 
nost 

. Another Polish entry, Krzysz- 
tof Kieslowski's BEnd Chance, 
left no doubt that this national 
cinema 'bra' a- ready-made- aodi 1 - 
ence in the Windy City. Very 
few of KteslowHkTB deft nuances 
concerning a young man at a 


tante Nina Ruslanova, augment- 
ed by Kira Muratova in her one 
and only screen appearance. It is 
a complex tale of relations be- 
tween an estranged coupte and a 
young girl hired to do their 
housekeeping. To the consterna- 
tion of the censors, no relation- 


ship Is spiritually or morally re- 
solved to anyone? satisfaction in 


the end - which has guaranteed 
Close Encounters an envious 
longevity over other social dra- 
mas released in the Sbyfcfc. Union 
twp decades ago. •'*-3 ‘ "* ' ' 

Nevertheless, despite the mesu- 
orable graces of Close Bncaun- 


crossroads of life during the ao- 
saval m Wodz 


ten, it's The Long Farewell that 
" r its clear 


ilitical upheaval 
and Warsaw at the end of the 
turbulent seventies appear to 


have gone unnoticed, judging 
the audience's reaction. 


from 

Some moviegoers even had 
copies of Lech Walesa’s new M- 


ography. 
For nu 


many, however, the Idng 
on the Chicago festival cake was 
the double-bill tribute to Soviet 
director Kira Muratova: Close 
Enoounten (1968) and The Long 
Farsuwfl (1971), ooth produced 
at the Odessa Studios in the 
Ukraine. It was doubtful far a 


impresses for its clear ideological 
break with the dogmatic formu- 
las of Socialist Realism. A di- 
vorced and emotionally erratic 
mother of a teenage son must 
face tin Utter truth of his inevi- 
table departure upon graduation 
to join the father in a distant 
city. Since nothing in tills frivo- 
lous lady’s life Gob, lover, par- 
enthood) is emotionally sound or 


socially" secure- anymore, the 
pain of ' 


-while whether Muratova Ca Ro- 
manian citizen living in the 


So- 


nde 
ft 
finally 



viet Union) would be able to 
an. American 
only an hour’s 
in Canada on a 
visit, but when 
she conquered. 

Clow Encounters apparently 
had mare to recommend it to 
Soviet film buffo in the States on 
the mounds of its three excep- 
tional acting performances: the 
first film roles of the leoendaiy 
(t-actor-balladeer Vladimir 
and the gifted debu- 


pain of her son's impend ing de- 
parture becomes more and more 
unbearable. 

Although filmed In Odessa, the 
story could have taken place 
anyw h ere In Soviet society, par- 
ticularly where the socially priv- 
ileged rub shoulders with the 
parvenu and the pseudo-intellec- 
•tuaL Both are castigated in the 
film mercilessly by Muratova 
and her collaborators, who in- 
clude two contributing Lenin- 
grad personalities - sc ript writer 
Natalya Ryazantseva and stage 
actress Zenafde Shaxka Under- 
standably enough, none of these 
exceptional women artists were 
subsequently able to find similar 
rewarding work in the Soviet 
film industry for years to come. 


Donatoni/Festival Hall 


Max Loppert 


The BBC Symphony Orchestra 
ter Hot 


. _ acute - In the process she may 

(under Peter Eotvos gave the have obscured the Italian words 


.British premiere of Franco Dana- of the faster movements, but I 

1 II- - - I- 1 1 


hardly imagine simple verbal 
clarity was Donatoni’s first aim. 
She should be invited to repeat 
the performance at the Prams. 

Indeed, the whole concert, an 


jtoni’s Arias in Wednesday’s can- 
cert - this year the Italian com- 
poser celebrates his 60th 
/birthday, and the gesture of re- 
spect was entirely fitting, it was 
welcome for other reasons also: 
for Arias, five love-poem i 
for stratospheric soprano 
Leonard) and huge, glittering or- 
chestra, is a gorgeous confection, 

'a bright, bold splash of vocal 
fireworks lfrak manages to be at 

jassr - jss’ffiranaK 


imaginative, 
thrift occasion (wii 


prodigally apend- 
i (with a 1 


huge ar- 
ray of percussionists lining the 
choir-stalls), deserves repeating 
Intact before a huger and more 
adventurous audience than tire 
South Bank now manages to at- 
con- 


This jdeasing contradiction 
Mcanse the 


arises because the texts are set 
not in “face-value" musical tran- 


certs. It began with a wen-re- 
membered item from the Boulez 
era at the BBC, Madema’s Aura - 
a modem concerto for orchestra 



but there was some 
the way. 

* 

Over the next month the regu- 
lar early-evening organ recital 
series at the Festival Hall on 
Wednesdays devotes itself to two 
20th century French Maitres re- 
ligieux - Durofle and T-»ngiat« 
(who himself appears next 
week). A performance of the Dn- 
rufie Requiem, in its organ, cel- 
lo, and small-choir guise, was 
this^week's main offering. Th$ 
Requiem, a. tribute to Faore . 
worthy; affectionate, -but rather 1 
long-winded (beca u se less mus- 
cular ly taut of thought and 
sound than the model), received 
a rather dainty reading from the 
Winchester Cathedral Choir un- 
der Martin Neary - gently, truly,- 


tuna, Dopatonl has contrived a 
brflhant revival of high-soprano 
coloratura as a vehicle for ex- 
pressive eroticism, with the ram- 
pant energy and tire inexhaust- 
ible facility (if not exactly the 
harmonic , lushness) of a mod- 
ern-day Strauss. The 
of arabesques (which 


was probably not Madema’s pur- 
pose in fulfilling a 


and sweetly sung but displaying 
a take up those few 


Chicago Sym 
phony birthday conunlstiooD.): 

After the interval we heard 
Becnd Alois Zimmenuann’s Pho- 
toptosis, another revival from 
part BBC concerts, blackly and 
hatefully < wn t emp jNt* n g a hand- 
ful of ostinatoa above a grim. 


reluctance to 
opportunities for dramatic con- 
trast that Durufle offers. It was 
a very "English’ account, to be- 
mildly enjoyed or mildly, re- 
proached according to taste 


1987 Mitchell Prize 


arcs from below the soprano organ -coloured haze; Eotvos 
a tav em > tof warp above it) and made Zimmermann’s cen tra l mi- 
the knife-edged orchestral tex- rage of quotes from popular Bee- 
tures are constant throughout thoven, Bach and ottos less fan- 
the work, yet by otto, subtler tastically disturbing than I 
means, Donatoni distinguishes remembered it, but the dark , de- 
theatmosphere and purpose of passive *gmy of the dose Was 
each poem. rendered with vigorous force and 


ssmsse 

~i tended to 


The winner of the 1987 Mitchell 
Prize for a book in the history of 
art field is Lee Johnson for his' 
two volu m es on “The paintings 
of tfri ffpiM* Delacroix’, published 
by Oxford University nrat He 
receives *10,000. 

The Mitchell, founded by 
American art collector and busi- 
nessman Mr Jan Mitchell, nowof- 


fera two subsidiary $8,000 prizes, 
afirstbooK 


jri ngfntf , ai 
flourish) a 
vfously lnt 

Miss Leonard gave a quite ex- where between madc^> comedy 
traordinary display of the and audience provocation. It 
avant-garde soprano d'agilita, went an too long, and too repeti- 
pure-toned, dear, rhjrthmically tiously, to achieve either end 


one for a first book and one for a 
work on 20th century art. Cecilia 
Powell won the first category for 
“Turner in the South" ( rale uni- 
versity Press) and Christopher 
Green the second for “Cubism 
and its Enemies", also published 
by Tale. 


Hamletmachine/Almeida 


Michael Coveney 


Robert Wilson’s work has not 
been seen In London for nearly 
ten years, which makes the ar- 
rival of Hamletmachine in Is- 
lington after a lengthy European 
tour an event in itself. Even bet- 
ter, the piece, based on a short 


19^7 pfay^ by the^ Berlin play- 


wright Heiner Muller, is a work 
of austere beauty and insidious 
charm. 


Most of Wilson’s work, large- 
scale minimalism with repetitive 


wordless ballet and epic spatial- 
of the 19705 


ism, is a product 
avant garde chic. I have always 
preferred the intensity of his 
time-stretching experiments 
with the autistic child Christo- 
pher Knowles, the exquisite ma- 
nipulation of sound, light and 
physical movement mapped out 
like a musical score. 

Carbon copy repeated action - 
as in 1 was anting on my patio at 
the Royal Court in 1978 - became 
a mannerism. Now Wilson, work- 
ing with Muller, has found a way 
of reworking the style. 

We enter the Almeida to see a 
grey ghost of a girl in a swivel 
chair. Must be Ophelia. Fourteen 
actors ait in a line at righ tangles 
to the audience. They face a 
white screen. Bidden by the 
whack of a Chinese block they 
enact a fragmented mime: a gin 
languishes in a tree, a trio of 
made-up 1940s ladies swish their 
nails on a metallic table, leaning 
at 46 degrees on their chairs, a 
boy in a leather jacket slouches 
towards a petrified girl, a dicta- 
tor seems to address a crowd be- 
low, a golden dancer traverses 
the stage on one teg, a man in 
black face and funereal garb cov- 
ers the eyes of a queenly matron 
in plum velvet 

These and other snapshot ac- 
tivities are separated from each 
other and played against a plain- 
tive single line piano melody. 
The scenario is then repeated, 
with one startling variation of a 
filmed sequence, four times, 
each time with injections of the 
Muller text that disposes of the 
Hamlet existential myth, sancti- 
fies the tragedy of Ophelia and 
recasts her as an activist Electxa, 
plays a tangential counterpoint' 
of a guilt-ridden nation awaken- 
ing to face up to the present. 

This poem for modem Ger- 
many using the tools of Hamlet 


and other sources - Marx, 
Charles Manson and T S Eliot 
among them- is presented as a 
search for meaning in a chame- 
leon-like artefact. This is precise- 
ly our problem each time we 
confront Hamlet. What does it 
mean, what can we ham from 

it? 

The machine is the perfor- 
mance, which turns on its own 
axis through 90 degrees between 
re-runs, completing the full cir- 
cular journey as Ophelia be- 
comes Electro, Hamlet resigns 
and a Player Hamlet bemoans 
the daily nausea of television. 
The hallet has a programme 
which we only discover by 
looking at it from every possible 
vantage point 

Just as Muller uses Shakes- 
peare, Wilson uses Muller. All art 

is predatory. The visceral and vi- 
sual impact, a stage full of wom- 
en facing in different directions 


with curious nude interlopers in 
ires, has the 


top hats and wild stares. 


surreal dead of night quality of 
ings. The 


Paul Delvaux's paintings 
filmed sequence seemed an in- 
congruous way to off-load super- 
fluous text without complement- 
ing in any way the physical 
tension. Otherwise, the perfor- 
mance Is a masterful exercise in 
private dream undermined by 
textual gloss. The trick Is, you 
know the gloss really came first. 

I do not know whether eco- 
nomics or inclination is forcing 
this concentration and contrac- 
tion on Wilson’s work, but I pre- 
fer him like this. His Stuttgart 
collaboration with M oiler earlier 
this year - an icily poetic medita- 
tion on Les Liaisons Danger- 
euse s In the baroque castle of 
Ludwinsburg - is a companion 
piece. Both are works oi great 
distinction, but there is more au- 
tomaton chorus work here in the 
style of Pina Bausch: interludes 
of head-scratching, head -banging 
and hysterical screaming tan- 
trums that evaporate with a 
smile and a shift of weight like 
spring thunder. 

Many of Muller's stage direc- 
tions are recited, confirming the 
Impression that this is a pentago- 
nal ballet with controlled textual 
explanation. A quick read of the 
text is recommended, available 
in a good programme book at the 
Almeida, where Hamletmackaw 
runs until November 14. 



Scene from "Hamletmachine” 


AJMatrMotr 


Arts guide 


November 6-12 


Caatiimed from page tt 
Exhibitions 


of Marie-Lou- 





Tke Tate Gallery. Turner In the 
new C3ore Gallery: The Tinner Be- 
quest, which ammmts to nearly 900 
eQ mjntinp, finished and unfin- 
ished, and a farther 19,000 or so 
watercolours and drawi ngs, teas 
been a source of controversy and 
dissension ever since It came Into 
the nation 's hands more than 190 
years ago. Turner had always 
Wished for a gallery , to htoelf 
whkh would show aU smeda of Ms 
work. Whether he would have ap- 


Jsa 



to the Tto as asuitahte 
nice question- The large , 
may be hung too low for one 
lived in a mm ettmtatiois 

and the tasteful oatmeal 
has decreed for the 
tenet is a far ay l — 
plum he is known to nave pw 
f erred. The vulgar neo-deco of the 
entrance has Me to recom- 
mend Sl But eight room* for point- 
irus and one for watsrcoloum give 
room enough, and with the tree re- 
aerve plferieBupstafra, evwy print- 
ing but the few.® restoration or on 
loan is cm the walL 


Goya with a portrait of Mi 
iaem a black-iaoe mandBa. 

Picasso's Century is dominated by the 
master, from the period of analytic 
cubism to 20 preparatory dcatdies 
for Guernica and to Ms last warts. 
But tiwn. is also Juan Gris, and 
Mira, D&U and Tapies. Petit Palais, 
Are Winston Churchill; Musee 
if Art Moderne de la VHle de Paris, 
Are President WQsan. Batit exhibi- 
tions are closed on Mondays and 
both end on Jan 3. 

Fn gwu ud; The Grand Palais Is stag- 
ing the flat retro s p ec tive of Fra- 
* in coDabonmop wdrii the 
riitan Museum, New York. 
100 paintings and as many 

ata the .artist’s lore 

3 , in which he saw a mini- 1 

festation of ‘nature’s perfect 
health'. The depth of observation 
In his Roman laodacapcs, mytholog- 
ical scenes and portraits co rmter - 
balances the deco ra tive fadUty of 
the Scenes Galantea m typical of 
the 18th century. Grand Palais. 

. Ends Jan 4. 

Avtcmrlsl present* a panorama of 12 
yean of its activities in favour of 
contemporary art as a saOcty. a 
Ubrwy and as an editor o 
originals’ of statues and 


Brothers and Charles Beschey are 
repre s ented in painting on copper 
plates or wooden panels of unas- 
Kutkuta but in all the 
' their art Gakrie d'Art 
■287 .Rue Safat-Hoo- 
ose (4260180$. Ends Dec 4. 


eteh- 


dra 

of 


PARIS 






j* £ «* ' 

** V- 

-a. J 


Fire Ceutarfa* of gpaafafc tots An 
ambitious ensemble of four exhibi- 
tions retraces the history of Span* 
ish art from the Golden Age to to- 
day. The two mott iumpoftant 
exhibitions are Greco To Picasso it 
the Petit Patels and P teazy ’a C en- 
tury at the Musee dArtModenie. 

In the Petit Palate to . Green with a 
vast viskmaiy Bapti sm of Christ, 
Velasquez with a portrait of Phi- 
Uppe Jv in hte hunting clothes, apd 


tuna have tried to present the im- 
age of the 20th century. Sonia De- 
launay was followed by Giorgio de 
Chirico, Zadkine's retrospective by 
Ham Ray photograsphs. There was 
sculpture by Chadwick and the art 
of the poster by Matisse. All rumi- 
nated in a homage to the late Presi- 
dent Pompidou - like Artairial a 
lover of tts* avant-garde. Artcurlal, 
9 Are (42991616). Ends 

Nov 14, . _ , k a 

Landscape la the Flemish and 
DotCk gebeolm Light and colour, 
change but the painter’s pkosureta 
recording them never reties. The 
Brueghel Dynasty, the BredaeL 


WEST GERMANY 

Maaich, Staatagalarie Moderner 
Kunst Sculpture from the German 
Democratic Republic (East Ger- ' 
many). A rersmt of the cultural ' 
agreement of May 1966 between 
last and Vest Gemaqy, rids oxW- 

' Mtltm l nri'fd es 130 ncniptores, some 
of thptn hngw than life, and about 
60 paintins ofaculpeureB by 61 srt- 
ista, and cocxes tear decades. It of- 
fer* a view of graphic works that 

hare not even Men seen in East 
. Germany before. Among the artists 
. acre Gustav $eitz. Frits Cramer, 
Werner Stoteer, Hermann Giockner, 
Valdeman and S«hlii» Grrimek, In- 
xeborg.'Hunziiiger and Franmska 
Lobedc Nov 6 to Jan a Mannhei m 
flfrdtisd i a Kuosthalla from Jap S3 
toEteba. 

ffiUeiMa, Rocsner- and Ffali* 
zaetu- Museum, Am Steins 1-2. 
Egnptii ttofrto a World ftiwej: More 
than 300 jdacas kamad by SO muse' 
umi In Europe, Africa and America 
- the fine wiw u i W Imi nf the mom 
. Importan t ISO yean 1560-1400 BC 
Of the New Empire hi Egypt. Th* 
bust <tf Pharaoh Thutnmas uL dis- 
covered In 1907 wkhout a face, can 
be seen complete in Hlideshelm. 
The face, found In Egypt only 20 
tom ago, was loaned by a Cairo 
Museum. Another highlight is a re- 
construction of tiia moo year old 
burial chamber of Sennefer. the 
former mayor of antique Thebes. - 
Clothes, household appliances, 
tools, cosmetics end Jewdleiyillns- 
trateihe everyday lne of Egyptian 
. BiA Mm 29. 

Berthe Gakrie lm Rathaus Te 
hot, TampeDufar Dsau^.ldS: 


tar Gausa'paintinff, 
inai, tU toraphs and 

ISO work retrospective 

Ms SOtii birthday and covering li 
to 1987. Ep* Nov 20. . 

Ba d ea Bed ea : KunathaUe Qdhtental- 
'«r Alice Se Cado-Oufa: The first: 
German retrospective of the Italian 
artist who was one erf the tntHtnm 
at Futnrte IBs artistic life under- 
went dramatic change when he met 
de GMtieo. finds Dee 6. 


rise and heyday of Amsterdam's 
grand hotels from 1960 to 1914. 
Ends Jan 17 

Aaatudta, , SUbauMK. A 

sweeping view of 17th-century 
- Dutch landscape painting, with 
more than 100 worts by over 60 


artists tracing the development of 
ire ana } ' 


rtALY 

Romet Palazzo Voto Bice _ 

(1900-1981). }60 worts fa o£L i 

and acidic by one of the first Ital- 
ian artiste to abandon figurative for 
abstract art. Ends Nov 22. 

Roane: ■ Palazzo Venezia: Bronzes 
found during excavations at T-»fc» 
Dias fa southern China in the 
1960s. Ends Nov IS, 


the gmue ana its effthoote from die 
dense creations of Vhtckbocns and 
Savoy via the chlDy winters of Av- 
ercamp. the trarufaility of Ruya- 

towering doudscapes of Bufateel, 
to the wooded s cene s of Hobbema. 
Ends Jan 8. 


Rotterdam: Bo ymana -Van Beunln- 
xn. From lone 


NETHERLANDS 


gen From Ingres 'la Ce- 

zanne presents a rich choice from 
the museum's large aifcttaf of 
19th century French drawings. 
Ends Nov 29 

jjmiAmmr, Rijlsmuscum Toor Oodhed- 

ea. Manuserim books and 

spaxining 1,000 yasra of 
tiM^mfinn ana knowledge. Ifatte 


the Magnificent demonstrate the 
wealth and skills at tbs high point 
. of tile Ottoman empire in the six- 
teenth century through the targe 
selection of (Humiliated manu- 
scripts. the imperial wardrobe, ce> 
ramies and jewel-entrusted weap- 
ons. Ends Jan 17. 

faster for African Art: Angles on 
African Art features ten co-cura- 
tors, ranging from an African 
tribesman to collector David Rocke- 
faBer, each of whom chase ten at 
sheir favourite pieces, making a 
well-rounded and diverse show. 
Other curators are writer James 
Baldwin, artists Nancy Graves and 
Roman Bearden and curator WB- 
Him Robin. Ends Jan 8. 

Jaa Kreuter Gallery: Thb new a 
kry te Inaugurated with 60 CuE 
works by Picasso Emm the Marina 
Picasso Coltertinn with two decades 
of paintings, dnwlngB, sketch- 
es and mints from 
Ends Dec 10. 41 B. 



Rotterdam, Prins Hendrik Maritime 

- Museum. Art ms -camouflage, or 
camouflage. as art? The startling 
■applied vorticism’of marine damfe 
pai n ti n g developed in the First 
world War by Norman WTIkhaon 
to decetre the enemy as to a slop's 
real position and comae. Ends Dec 

Ait bttticatet 48 key Impressionist 
and Post-Impresskaust worts from 
the Coartanlfl wn Bytfa n tipyf ^nwn . 
lea with printing* by Cenimei Ma- 
Seurat and Gauguin. 

Amsterdam? Rtyksmuseum Prln- 
troom. As i pendtont to the surrey 
of lan d sca p e painting hi the main 
ffllte ri es, the printroom to showing 
a fine selection of 100 ffth century 
drawings devoted to the theme of 
Land and Water, tote Jan 3 . 

Amsterdam: -Historical Museum. 

_ jJb, nten- 

'regfstax chart the 


SPAIN 

Pat c«il nnr "Leonsrdo da TJacL Na- 
ture Studies'. GO drawing on ban 
fey the Bqyal library at Wimhar 
(fastle, shown recently at the Met* 
npofitan Uwetrm, stockhoha aad 
- ’fokyo. Centro Cuttnral La Caixa, 
• Preen de San JuanlOa EndaNby & 
Madrid: 'Bean Klein and fa d h to. 
Traiufonnstion and 
Centro Cultural de la 
rano 60. Ends Nov 8. . . 

Madrid: “Mark Rothko 1903-1979*. 54 
worts by North American artist of 


WASMMCT0N 

Matianal Gallery: A Century of Mod 
era Sculputre, the Patsy and Ray- 
’ mood Nreher ColtectkHL contains 
malar works by Rodin, PtoftM*- 
tiste, Gabo, GlscomettL Ernst, 
. Moore and Sena. E nds Ja n a. 


Russian ari^ln ^oup ed-Wldi da 


Kooning end Pollack. This show 
was seen recently at the Tate fa 
London. Fnndaclon Jnan 
lfaroh,Cute0o 77. Ends Jan & 



MEW YORK 


lletropbHtsa-ltoM: 300 object* 
from the Age of Sultan Suleyman 


tefag of Chinese Ink 

srsttiaBiNRyjA 

styles of the Sotatsu and Kano 
Souxda. best-known for their huge 
raid and silver decorated screens. 
Tokyo National Museum, Ueno 
Part, Ends Nov S8. 


Saleroom/Antony Thomcroft 


It could have been worse 


The first real test of the art mar- 
ket after the international slide 
in share prices took place at 
Sotheby's In New York on 
Wednemlay night when contem- 
porary art came under the ham- 
mer. This is the sector which has 
enjoyed an amazing price spurt 
in recent years, fuelled mainly 
r the money being made on 
all Street and by business gen- 


% 


eraUy. 

When 


the newly rich start to 
buy art, at least in the US, they 
go for contemporary artists, es- 
pecially American contemporary 
artists. Sotheby’s must have been 
very apprehensive about the fate 
-of viis auction, especially as the 
estimates, and reserves, had been 
fixed some months ago, before 
the crash but after some very 
successful sornmer sales of mod- 
em art. 

In the event things went fath- 
er better than the saleroom must 
have feared. There were three 
auctions in all, including two 
one owner sales, and the com- 
bined total was 617,661,600 


was also just below expectation 
at $1,210,000. 

There were sucesses. Raus- 
chenberg's “Backwash" , sent for 
sale by Goucher College, added 
$814,000 to its funds, at the top 
of the forecast, and a bright yel- 
low and red canvas by Rothko 
was spot on at $616,000. Another 
artist to be in favour was Morris 
Louis and an acrylic of colorful 
vertical stripes made $495,000, 
well above estimate. 

There was also a British suo- 
“Ponrait of Mr and Mrs Phi- 


(£9,444,706), with 23.4 per cent 
unsold. Until ‘ ' 


the boom of the 


last eighteen months such a 
hi In 


bought in total for a contempo- 
rary art auction would have 
been considred par for the 
(Course. 

But it was noticeable that only 
the best works were finding buy- 
ers and then at prices that were 
often, near the bottom of the pn* 
.sale estimates. For example, the 
top prieve, $2,036,000 for a major 
de Kooning oil "Woman ( 
Green)" was in fact just below 
■estimate and Jackson Pollock's 
‘‘Untitled," a 1948 oil and collage 
on pa^er mounted on 


cess, portrait of Mr and Mrs Phi- 
lip King' by Howard Hodgkin al- 
most doubling its estimate at 
$220,000. If the dollar had not 
fallen so much recently It would 
have just about neen a record for 
Hodgkin: one of his works made 
£155,000 at a charity auction in 
London in July, and prices at 
charity auctions tend to be In- 
flated. At a lower level Mic ha e l 
Morley also did well. 

One of the single owner sales 
consisted of some thirty worlks 
from the estate of Xavier Four- 
cade, who was de Kooning’s deal- 
er and one of the gnat figures of 
tile New York art All sold, for 
$2,899,050, but “Seated woman.* 
a de Kooning bronze made 
*352,000, way below its *450,000 
law estimate. "Untitled I," the 
other major work on offer, was 
also a slight disappointment at 
*374,000. There is always a risk 
In putting so many wanes by an 
artist on the market at once: the 
demand is seldom sufficient. 
Seven Dubuffets offered by Hope 
and Abrahamn Melamed also 
met a mixed response, bringing 
In $809,000, but with the major 
painting, “l£ Folatreur’ unsold 
at $410,000. 


, 11 : 




r~ 


Financial Times Friday Novembers 1987 


FINANCIAL TIMES 

BRACKEN HOUSE, CANNON STREET LONDON EC4 P4BY 
Telegrams: Rnantimo, London PS4. Telex: 8954871 
Tfetephone: 01-248 8000 

Friday November 6 1987 

Mr Lawson’s 

options 

"MAY YOU live in interesting maintaining growth at the fore- 
times” goes a Chinese corse, cast level mil require policy 
The times are certainly getting adjustment, with a domestic 
very interesting. The question boost to offset a greater than an- 
is whether they need an equally ticipated external decline. For- 
interesting and innovative re- Innately, the UK starts from a 
sponse. position which would allow Qs- 

Perhaps the main achieve- cal policy to be nsed for that 
ment of the British Government end with no difficulty, if re- 
was not so much to make eco- quired, even if that entailed a 
Domic performance outstanding substantial current account def- 
as to render questions of macro- icit during a world recession, 
economic management increas- At present, monetary policy, 
ingly boring alter six years of driven" by the exchange rate 
steady, if unspectacular, eco- commitment, is already expan- 
nomic growth. sionary, with reserves having 

The events of October have risen by almost $7bn last month 
chang ed all that The question and almost $20bn in 1987. There 
now for Mr Nigel Lawson^he cannot be many arguments for 
Chancellor, is whether to allowing sterling to appreciate 
change either his view of the tu- against the D-Mark especially 
ture or his policies. On balance when the dollar is falling, 
he seems to have decided, prob- 

ably rightly, that the ship is in Further arg ume nts 
as good a shape as possible to *7 

meet an economic storm which with the gap between tfcree- 
mav nrove to be anything be- month money market rates in 
tween a brisk windand a ty- West Germany and the UK atm 
phoon. more than 5 per cent, the for- 

The principal policies are litr eign exchange inflow is bound 
tie changed. On the monetary' to continue unless there is the 
side, the Chancellor has reaf- expectation of a sterling depre- 
finned what has long been elation. Either interest rates 
known, that monetary targets are cut to close to West German 
have been replaced byex- levels, in which case they be- 
change rate targets, principally come negative in real terms do- 
against the D-Mark. Where mestically, or there is a foreign 
there has been some clarifies- exchange inflow, swelling the 
tion is in the policy of sterilis- domestic monetary base and so 
ing the effects of whang * rate tending to drive down interest 
intervention. Sterilisation, like rates indirectly. 

St Augustine’s chastity, will These circumstances provide 
come, but not yet farther arguments in favour of 

EMS membership. If one is be- 
ing forced to adopt West Ger- 
man short term interest rates it 
would seem desirable to partic- 
ipate in a system whose effects 
on expectations might help to 
achieve a West German rate of 
inflation as welL 
More broadly, it looks pecu- 
liar to insist on exchange rate 
stability under an increasingly 
unconvincing Louvre Accord 
while refusing to become a fall 
member of an that 

continues to Auction. Further- 
more, if one is to fix the ex- 
change rate to the D-Mark, it 
would also appear to be more 
sensible to do so in a way that 
could allow greater influence 
over West German macroeco- 
nomic policy. Perhaps that 
could be even be made a condi- 
tion for fall membership. 


Central conundrum 

The fiscal policy is also reaf- 
firmed or. If anything, is tighter 
than projected. This year's 
PSBR is now projected at Clhn, 
a Ya per cent of GDP and the 
forecast for 1988-89 is for the 
same PSBR 

Where do the risks lie? 

. The direct effects of the crash 
on domestic demand could turn 
out to be quite modest In par- 
ticular, the negative effects 
could be largely ofibet by the 
greatly reduced rates of inter- 
est Indeed, with the Treasury 
now projecting per cent in- 
flation over the next 12 months 
real rates of interest could be- 
come lower than for many 
years. The credit-driven rise in 
house prices-might even p ic k up 
in these circumstances. 

The central conundrum is the 
perfomance of the international 
economy. The Treasury projects 
world trade growing at 3V& per 
-cent in 1988 but this could easi- 
ly turn out to be very optimistic. 

It is possible, therefore, that 


Chancellor is in the enviable 
position of being able to react to. 
events without being forced to" 
do so. However, apart from 
preserving his options, all he 
can do at the moment is hope 
that the times do not get still 
more interesting. 


The protection of 
copyright 


THE COPYWRIGHT Designs 
and Patents Bill is one of the 
most substantial legislative 
tasks of the 1987-88 session of 
Parliament 

It is a long bill of 277 clauses 
with seven schedules and is 
hi g hl y technical. Its part, 
restating the law of copywright 
and updating it to cover new 
technologies of artistic produc- 
tion and reproduction, is of 
great importance for all British 
industries concerned with in- 
formation. It deserves the clo- 
sest scrutiny, and it would be 
premature to reach any conclu- 
sions on its merits before its 
likely impact is clarified by far- 
ther discussion. 

By contrast, the provisions 
dealing with industrial design 
are dearer In their implica- 
tions and open up welcome new 
means of protecting creative- 
ness, particularly in small and 
medium-sized enterprises. As to 
the part dealing with patents, 
this is disappointing both in its 
provisions and in what it leaves 
out 

The bill would do away with 
the absurd copywright protec- 
tion - for 50 years after the de- 
signer’s death - of motor car ex- 
hausts and similar 
•three-dimensional reproduc- 
tions of drawings,’ introduced 
by judicial aberration against 
the intention of Parliament. 


Advertising power 

Instead, there would be pro- 
tection for original functional 
designs embodied either in a 
document or in the product it 
self No registration would be 
necessary and the protection 
would be for 10 years from the 
start of marketing, but no more 
than 15 years from the develop- 
ment of the design. 

This seems to give ample time 
for the exploitation of a new 
product without fear that a fi- 
nancially stronger company will 
copy it and dominate the mar- 
ket by its advertising power. 
The originating enterprise will 
claim protection only for prod- 
ucts which are commercially vi- 
able and will be able to do so 
without costly patent applica- 
tion and litigation. 

The bill meets objections 
raised after the publication of 
the 1986 White Paper on Intel- 
lectual Property and Innova- 


tion. It excludes from protec- 
tion the method of construction 
or the features necessary to 
make tiie product fit or match in 
appearance another product to' 
which it is to be connected; in 
other words, it leaves the manu- 
facture of spare parts free, ex- 
cept when there is technically 
unnecessary ’slavish’ copying. 

So far, so good, but there re- 
mains the rinnp »r that new de- 
signs will be Introduced only to 
block the creativity of competi- 
tors. There may be a need to ex- 
clude protection of designs 
which are not marketed within 
a reasonable time. 

Vociferous attack 

The bill would give wide ju- 
risdiction over the validity of 
design rights to the Comptroller 
of the Patent Office but would 
leave infringement actions to 
the courts. This seems wrong In 
practice, the two matters are al- 
ways connected and it should 
be left to the parties to choose 
the cheaper and quicker adju- 
dication in the Patent Office 
from which appeals to court 


should require leave. 

A similar jurisdiction over 
patent disputes was proposed- 
In the 1986 white paper. Howev- 
er, the Government retreated in 
the face of a vociferous attack 
by patent lawyers. Instead, the ; 
bill proposes the creation of 
county patent courts by order of 
the Lord Chancellor. The plain- 
tiff would have the choice be- 
tween that and the High Court 

The intention seems to be to 
create only one such court in 
London and to limit its jurisdic- 
tion to claims up to £100,000. 
Such provision is quite useless, 
except for the rare disputes be- 
tween two small companies. As 
before, a large company will be 
able to make a not-so-rich in- 
ventor dance to its own fame by 
a mere threat of the immensely 
costly and interminable litiga- 
tion in the High Court. 

More than 70 per cent of UK 
patents granted m 1985 and 1986 
were taken out by foreign com- 
panies. A patent monopoly is a, 
powerful weapon in the hands 
of a stron&interaatzonal compa- 
ny, but a worthless though ex- 
pensive piece of paper in the 
hands of a smaller company. 
The Government does not seem 
to have reached the necessary 
conclusions. 


Expensive decisions lie ahead for European 
governments re-equipping their air forces 
with fighters. David Buchan looks at the 
pressure to collaborate - and the problems 

A dogfight 

between 
good friends 


Ths soi rina coxt «* fighter* 

MiSon ECUs (1980) 

Based wweraas oi ftrs too u*»is. , 

irUmyoBHkat arem fi w es p a n syewne t 
(mbting snngic tnfflM’i} / 


^ New combat \ 

aircraft types entering service* 


1 . 

* 


20 


-10 


10 


1900 1925 1950 1975 2000 

Year of entry to service 


Indigenous 


*000 
7- A 


SOME BIG POLITICAL deci- 
sions with large price toes are 
soon to be taken, which will give 
the European jet fighter market 
its shape into the 21st eentuy. 
First this autumn, Britain, 
West Germany and Italy, the 
three countries that built the 
Tornado have to decide, 

with Spain, whether to go ahead 
with expenditure of about £5bo 
just to develop, as distinct from 
producing, the European Fight- 
er Aircraft (EfaX 
Second: the US Government has 
soon to decide whether it is 
ready,for the first time, to col- 
laborate with allies in design- 
ing a major combat aircraft. If 
McDonnell-Douglas and Gener- 
al Dynamics are to wiwfaiw , 
and perhaps expand, their 
share of the European Hghtw 
market with updated versions 
of their F-18 and F-lfi, r cs pe c - 
trvely. Washington must let 
them share research with allies. 
Third: France which two years 
ago dropped out of the Efe con- 
sortium has to decide whether 
to go it alone into frill develop- 
ment of its Rafale fighter, even 
if it can find no partner with 
which to split the cost This di- 
lemma coincides with a slump 
in the export-oriented French 
defence industry, dragged down 
fay its aerospace leader, Das- 
sault, which has seen pr o fits 
fall by 90 per cent in the first 
half of this year and has laid off 
hundreds of workers, after fail- 
ing to sell a single new combat 
aircraft in the last two years. 
Ironically, France’s most proba- 
ble Industrial partners on Ra- 
fale are American. 

An estimated £20bn for devel- 
opment and production of 800 
Efas or, worse still, FEY 130hn 
(£10bn) for up to 330 Rafales are 
vast sums to spend on manned 
aircraft which, to many ana- 
lysts, seem increasingly vulner- 
able to, and replaceable by, 
modern missiles. But the 
of new Soviet Oghtersjfke the 
Sukhoi-27 (Flanker fa f its Mato'' 
name), faster and heavie r than 
the West’s current top-of-the- 
line F-15, beckons Western jet 
designers to ever-new combina- 
tions of *kiloiiewtons” of engine 
thrust and "fly-by-wire” comput- 
ers to control the deliberately 
unstable - and thus agile - air- 
frames of the modem fighter. 

In frontline military aircraft, 
as in no other aspect of modem 
defence except nuclear weap- 
ons, feelings of political pres- 
i tige run as deep as costs ran 
high. *We cant afford to do it, 
i but we can’t afford not to, is the 
1 schizophrenic attitude of many 
(middle-size) countries to jet 
sgtifay manufacture 


Hong Kong bets 
on education 

Hong Kong appears to be estab- 
lishing a fiwd of academic ma- 
fia with the appointment of Dr 
Woo Chia-Wei as vice-chancel- 
lor of tiie territory’s third uni- 
versity, due to open its doors in 
1991. 

For Woo, who is currently 
president of San Francisco 
State University, was Shang- 
hai-born, as was his recently- 
appointed counterpart at the 
Chinese University in Hong 
Kong, Dr Charles Ku an Kao. 
Hong Kong’s third vice-chancel- 
lor, Professor Wang Gungwu at 
the University of Hong Kong, 
may not be able to boast family 
roots In Shanghai, but a univer- 
sity education in Nanjing, the 
first city up the Yangtze from 
Shanghai, gives him good cre- 
dentials far membership of the 
territory's academic "Yangtze 
mafia”. 

The appointment of Woo, 
whose tertiary education has 
been entirely in the United 
States, and who has been a pro- 
fessor of physics at various US 
universities over the past 20 
years, also illustrates the vast 
reservoir of overseas Chinese 
talent that is being plundered 
with increasing frequency by 
organisations in Hong Kong, 
And indeed in inland china. 

Professor Kao, who took up 
his post as vice-chancellor of 
tiie Chinese University just a 
month ago, is a specialist in fi- 
bre optics and came to the uni- 
versity alter being senior scien- 
tist of the ITT Corporation in 
the US. 

Hong Kong’s third university, 
to be called the University of 
Science and Technology, will 
start life in 1991 on a pictur- 
esque campus in Hong Kong’s 
north eastern New Territories. 

Focusing on science, engi- 
neering and business manage- 
ment, it is intended to provide 
urgently-needed extra opportu- 
nities for tertiary education, 
and to produce a new genera- 
tion of scientists, technicians 
and geten tificall y-capable en- 
trepreneurs who can maintain 

the territory's competitive 
niche in world markets well in- i 
to the 21st century, particularly 
in the electronic industries. 

Hong Kong's two existing uni- 


In 1950 a fighter could be 
bought for well under £Im; to- 
day's Tornado costs £18m. In 
1950 the combined air forces of 
the UK, France, West Germany, 
Italy and Spain had 7,000 com- 
bat aircraft; today they have 
3^KXX With this sort of cost infla- 
tion and force depletion, why, 
one might ask, not buy off anoth- 
er country’s shelf and let that 
country foot the aircraft devel- 
opment bill? 

Many smaller European and 
most fluid World do 

jnt that, although all 

want sense transfer of technolo- 
gy and shared production. But 
most middle-size industrialised 
countries insist that, prestige 
aside, buying off someone dee's 
di»if although initially cheap- 
er, ends as a false economy. 

They argue that a foreign sell- 
er can dictate, even to a country 
producing an aircraft under li- 
cence, the cost of spares and 
in-service support According to 
Mr Genie Wiliox. the British 
Aerospace exec u t iv e who now 


In frontifne 
military aircraft, as 
in nuclear weapons, 
feelings of political 
prestige ran as deep 
as costs run high 


directs the Munich-based Euro- 
fighter consortium respons i ble 
for Efe, these extras typically 
represent over half the total 
lifetime cost of a military air- 
craft, or more than develop- 
ment and production combined. 

Thai, there is the spin-off ar- 
gument. Mr Colin Green, gener- 
al manager of Euro jet, the four- 
rttttion-^oitt ortixf gr "developing 
the Efe engine, says: "Without a 1 
viable military progr a mme, it is 
hard to see how civil (engine) 
p wi g r ammi* mb continue," and 
riiimi t jift in the case of his 
company, Rolls-Royce, there is 
considerable civil-military 
"cross-feeding. 

Lessons from the operation of 
militazy engines at higher 
thrust and temperatures can be 
applied to civil aviation, while 
experience from tiie cMl em- 
phasis on ft id saving and noise 
reduction fflowB in the opposite 
direction. 

In addition, military planners 
often say that a straight import 
would not meet their "opera- 


tional requirements." Some of 
these specifications' are impos- 
sible for laymen such as minis- 
ters to understand and thus con- 
testi Others are comprehensible 
end cle arcut . For instance, a 
key reason why France fell out 
of tiie Efe group in 1985 was that 
it wanted a lighter-weight fight- 
er both to export and to land on 
its navy carriers. The four re- 
maining Efa countries had less 
interest in export and nose in 
petting the Efe to sea. 

The ultimate, and essentially 
political, argument in favour of 
fighter-building is that once a 
country drops out of the busi- 
ness, it never gets back. Strate- 
gically, should hardly mat- 
ter to Europe, as long asthe US 
remains an ally likely to fight 
the same war against the same 
enemy. 

Having a domestic production 
base that could .say, double out- 
put to eight aircraft a month in 
wartime seems irrelevant when 
a future war could be decided 
in hours, if not minutes. But Eu- 
rope, as a collaborative whole, 
is even less likely to give up 
winUny militazy aircraft now, 
when the change in East-West 
relations is pushing it to do 
more for its own defence. 

In addition, the European 
military aircraft industry has 
the US in Us sights as commer- 
cial enemy just as much as it 
sees the Soviet Union as its mil- 
itary adversary. "You must see 
Efa together with Airbus and 
tiie Tornado, which has won a 
lot of practice bombing compe- 
titions in the US," says a Euro- 
fighter executive. "In that per- 
spective, the European fighter 
industry has become a threat to 
US companies, which, with 
their rival offers of F-18 up- 
dates and the like, want to kill 
off not only the Efe project; but 
the whole industry*. 

There is, or should be. rela- 
tive stability in the market 
Both Europe (as characterised 
narrowly by the Efa consortium) ’ 
and tbe USy^miRainjMlookrtike r . 

milinfaliTiing ITT the 19B0S * 

main markets they won in 
1970s and 1980s. The struggle is 
more at the margin, for markets 
like Belgium, which has links to 
France through past Mirage 
purchases, to the US through its 
current mainline operation of 
F-lfls, and to the Efa partner 
countries, which are its closest 
military collaborators. 

But the curious position of 
France over the Rafele has cre- 
ated a new fluidity. Traditional- 
ly, tiie most anti-American of 
Nato allies, it now s eems , finite 
de mien s, th e ma jor European 
co untry most driven to industzi- 


Numbur of combat 
■Iferifl In sorvieo* 

. . •France, West Germany, 
V tody, Spain & UK 


Men and Matters 


versifies, two polytechnics and 
eight technical institutes cur- 
rently offer 33900 places for 
tertiary education. 

It is a measure of how inade- 
quate this Is In meeting local 
demand for higher education 
that more than 30,000 Hong 
Kong students currently fill 
places at universities in Cana- 
da, the US, the UK and Austra- 
lia. The new university will, by 
the mid-1990s, offer about 7,000 
additional places, with the gov- 
ernment aiming to provide 
, -50,000 places by 1997. 

While Woo said in San FYan- 
I cisco yesterday that his first ma- 
jor task would be to find sailor 
! academics of the right calibre 
to fill professorial and adminis- 
trative posts in the university, 
his first real hurdle will be to 
come to terms with the free- 
wheeling realities of a Hong 
Kong he last saw as a secondary-, 
school pupil - not lea st that tiie j 
lion’s share of the HK$22bn , 
needed to filed the university 1 
will be the fruits of gambling A 
donation of HK$L5bn was made 
recently fay the Royal Hong 
Kong Jockey Club. 

| Airworthy 

; The $170m contract awarded 
! for a US Navy airship that I 
; mentioned the other day is pro- 
viding fresh momentum for a 
corner of the air industry which 
has been out of fevour since the; 
great passenger dirigibles 
failed in the 1930s. 

Airship Industries, the Brit- 
ish company working on new 
non-rigid airship designs, is 
now under the command of 
Mils Hoffinan. 

To handle the contract it has 
joined forces with the US poop 
! Weatinghouae to form Westmgh- 
o use- Airship Industries Inc. 

An American Navy man. Rear 
Admiral Edward Hogan, has 
now been made president of the' 
joint company. 

As the US Navy will be the 
customer and the US govern- 



"Used to be swings and n 
touts - now it’s Interest : 
and electricit y p ri ce s .* 


ment the paymaster during the 
building ana trials of ♦***» dow 
radar surveillance airship Ho- 
gan appears to be an excellent 
choice to act as the project’s 

link-man 

He is respected both for his 
engineering and his naval and 
fly in g afcfllg 

As a test pilot he established 
the Top Chin Academy, the US 
-Navy’s fighter weapons school. 
He commanded an aircraft car- 
rier and served as the Navy’s I 
diief test pilot 

[ Coming down from the skies ; 
;he has been bead of US Navy , 
public affairs for the last two 
{yean before retiring. 

Roll on 

1CI has decided to provide 
some extra help, I hear, fa- 
leading Industry ana- 

lyst, Stuart Wamsley, who has 


"We thought we should help 
him to celebrate by making his 
job easier in future,* says Eddie 
G allac hcr JCTa investa rela- 
tions manager. 

So Wamsley, who left Green- 
well some six months ago and is 
about to join Morgan Stanley, 
was last night p r ese n t e d fay 
ICTs finance director, Alan 
Clema ti s, with two large dice 
with which to cast his advice. 

One die bears on its faces the 
logos of Europe’s six largest 
c h e mi cal companies-The other 
bears six words -hold, buy, sell, 
.positive, negative, and ~panic. 

Mogul’s money 

A gold Islamic coin which is 
to be auctioned in Geneva next 
week could set a world record 
price. The Habsburg, Feldman 
auction house experts It to fetch 
around $10 million dollars 
which, even allowing for dollar, 
depreciation, is not a sum to be 
sneezed at 

The 17th century gold coin is 
believed to be the world’s lar- 
gest It weighs 12 kg <261bs>and 
is 21 centimetres (about eight 

linrhan) in dlamrt BT 

It will go under the hammer at 
Geneva’s newest auction house 
on Monday evening with anoth- 
er, smaller Islamic coin of tiie 
same period valued at$4m. 

The 22-carat coins, which are 
inscribed with Arabic and Per- 
sian verses, were minted fay two 
Mogul emperors as ceremonial 
gifts to reward high officials. 

The larger coin, known as the 
!*One Thousand Molars’, was 
minted for empemr Jahangir of 
Delhi in 1613. 

The smaller coin, the ’One 
Hundred Mohurs’ was minted in 
1639 by Jahangir’s son, Shah Ja- 
ban - who built the Taj Mahal at 
Agra for his favourite wife. 

lhe British Museum in Lon- 
don- owns a plaster cast of a 
comparable coin, the ’Two Hun- 
dred MohursT, -a coin since lost 


Cashing In 

Heard in the Law Coots: "He 
told her that everything he had 
in tiie world was hers - and now 
she wants it" 



al collaboration with the US. 

ing 20 to 30 F-18s for the Foch 
and Clemencean aircraft carri- 
ers, which will lose their obso- 
lescent Crusader fighters 
around 1963, before a naval ver- 
sion of the Rafale can possibly 
be airborne. McDonnell-Doug- 
las has also been discussing In 
Paris collaboration on updating 
the F-18 and making the Rafale. 
TBflm— CSF is in search of ra- 
dar technology from Texas In- 
struments to put in the Rafale's 
nose. 

Reciprocity in transatlantic 
defence, as well as civil trade 
has also become a political de- 
mand from Washington. The re- 
cent increase in US purchases 
of arms from Western Europe 
has caused a protectionist back- 
lash cm Capitol HilL This Is de- 
spite the fact that such imports 
only amount to $3bn (£L7on) a 
year, or just 2 pa cent of total 
US defence proc ure ment of 
glSObnayear. 

Every industrialised country 
has the choice of making its de- 
fence equipment itself; 
it in partnership, a importing 
it, but the decision is easier for 
some countries than others. 

Sweden, for instance, feels its 
policy of quite heavily armed 
neutrality roqitirfeif a formal go- 
it-alone approach. This, howev- 
er, masks a high degree of im- 
ported technology, such as the 
wing materials , Ferranti radar 
components and Hughes cock- 
pit displays that have gone into 
the new Gripen fighter and may 
help keep it within its relatively 
modest budget of Skr 40bn 
(£3.7bn) at cu r re nt prices for de- 
velopment and production of 
MOfighter*.^^ ^ 

the US shelf Tomitigate Wash- 
ington’s complaints about Ja- 
pan’s huge trade surplus. Tokyo 


25 years In the 


fs soon to buy efthotiie F-15 a 
F-16 design for its FSX airemfh 
but will then spend at much as 
$8bn on just 150 aircrafts, much 
of it on farther development. 
Likewise, loners recent deci- 
sion to cancel its- Levi fighta 
was painftal in domestic terms, 
but ultimately inescapable. H 
could not spend $L5bn and 
more from the US to build ealy 
290 aircraft, against the donor 
country's veto. 

The US Government can af- 
ford to make fighters by it- 
self; but individual US compa- 
nies no longer can. They are, for 
the first time, teaming up to de- 
velop new fighters for the air 
force and navy and helicopters 
for the army, to share financial 
and technical risk. These com- 
panies are only doing what 
many European countries have 
done fa some time. 

If all goes to idan, Efa will be 
in fall development early next 
yea. But there are last-minute 
nerves in Bonn. West Gossan 
resolve has been shaken by ev- 
er-rising - estimates of Bonn’s 
share or Efe development, from 
DM 4bn (£L3bn) two years ago. 
to more than DM 71m (£Z34bn) 
this summer and even hl ghw 
now , in an unpleasant remind- 
er of the cost overrun on the GR 
strike version of the Tornado. 
Competing for defence D-Marks . 
is me Franco-German PAH-2 
project, which Chancellor Hel- ■ 
mot Kohl is keen to revive for 
political reasons. 

Part of tiie reason why West 
Germany is shakia on Efa than 
London, Rome or Madrid is its 
indulgence in more open de- 
bate about militaiy matters 
than tiie other partners. The 
powers occupying Germany af- 
ter 3945 insisted on visible scru- 
tiny of defence projects there, a 
lesson in democracy some of 
them have never applied to 
themselves. Thus, at parliamen- 
tary insistence, Bonn has exam- 


ined more openly than other 
Efe partner countries the alter- 
native of buying the F*I& 

It is still possible that Bonn 
will bring down the whole Efe 
edifice by opting out when the 
issue comes up for g overnment 
consideration !* ter this month. 
So, the UK Government hopes 
that a meeting today of the 
Equipment Policy Committee 
(EFQ of its Defence Ministry 
will stiffen German resolve. The 
EPC will have before it a papa 
setting out UK alternatives for 
replacing Jaguar* and Phan- 
toms: more Tornados and Harri- 
ers. tome F-lfls. development of 
a purely national fighter known 
as PUG designed by BAe, and 
the Efa. There is no doubt that 
the EPC will choose the last 

The UK has tiie same 33 pa 
cent share of EXl output and 
cost as Germany, bat seems 
more set against any alternative 
to the project The last military 
fighter tiie UK made by itself 
was the Lightning, a generation 
ago; the PUD design is de- 
scribed as "a yardstick’ against 
which to measure Efa. The last 
fighter the UK bought abroad 
was Phantom in the mid- 
1960s, and the RAF does not 
think the F-18 would be up to 
the job in the 1990s. 

There is, hflWCtter.'symMtfcy 
in Efe partner countries for 
France in its Rafale dilemma, 
which tiie present French Gov- 
ernment inherited and for 
which the late Marcel Dassault 
was partly responsible by in- 
sisting on his preference 
against the other Efa four. 

The betting is that m combina- 
tion of Gallic pride and Penta- 
gon bureaucracy will prevent 
US-French co-operation going 
very far, and that Efe and Bar 
fele. if they both go ahead, will 

be inrfmttr-inlly through 

common components. Any fu- 
ture European fighter, it is as- 
sumed, must include France. 


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27 




Financial Times Friday November 6 1987 





f- 
- • 

V" "fiii' 

' - 

- * 




-:»ir 


>• 






and may be mare feu a stopgap 

T wfitdS IS A curious assump* 
tloii, even among some of his 
best friends,' that Hr Nigel Law- 
son has no interest in becoming 
Prime Minister. That has always 
see pied slightly dubious, if only 
on the ground th»* few politi- 
cians would be likely to tun 
down the job, were it remotely 

on offer. 

After his handling of the BP 
issue, his Autumn Statement 
and his Man s i on Boose speech 
this week, the question hr again 
being asked: is the Chancellor a 
runner? 

Certainly Mr Lawson would 
have all the aversion ofaCorio- - 
lanus to going out and solicit- 
ing. GorioXamia is. In feet, his fe- 
vonrite Shakespeare play. And 
one very much doubts If he 
would like to be leader of the 
opposition. Yet it must have 
hi* initui tha t his abili- 
ties, and now his reputation, are 
at least as high as those of any 
of the other potential candi- 
dates for the succession. 

Moreover, he might make a 
very good Premier, especially 
following Mrs Thatcher. Where 
she has been all busy and inter- 
ventionist, directing the work of 
any Department thought not up 
to scratch, he would stand back 
and let Ministers get on., with 
their departmental tasks, be- 
lieving that once the economy 
was on the right lines, most oth- 
er problems would begin to 
solve themselves. For the Chan- 
cellor is one of nature’s conser- 
vatives: he does not see the case 
for unnecessary .'change. After 
the years of Thatcher radical- 
ism, he could be the antidote: 
one of those consolidators tong 
sought after by Mr John Biffon. - 

At present the question is ac- 
ademic because there is no va- 
cancy. One day there will be. In 
the absence of an obvious suc- 
cessor, the Party is stuck with a 
system of electing a leader that 
seems designed to ensure that a 
relative outsider will win. If 
there Is no clear victor in the 
first ballot of Tory MPs, there is 
» second ballot into which new 
candidates may enter. If there 
is still no clear winner, there is 
a thir d ballot using the single 
transferable vote: that wimit 
allowing MPs to state their sec- 
ond preference: The pro c e ss 
could be extremely messy, leavt 


POLITICS TODAY: Malcolm Rutherford 

Next move, 
next door? 

Lawson for PM? A logo for Lord 
Young. A song for Brooke 



tog the least disliked but not 
necessarily most capable candi- 
date to come out on top 

No-one is suggesting that Mr 

Lawson should throw his hat in 
the ring now, but he does him- 
self no service by letting his 
Mends put it about that he has 
no Interest in the matter what- 
soever. He should also- quash 
the rumours that he has his eye 
on the Foreign Office, a post for 
which he is quite unsuited and 
which lugtby temperament, 
would find peculiarly tedious. 

Consider a final point Mr 
Lawson is now the one Minister 
whom. Mrs Thatcher could not 
possibly sack. Els enforced de- 
parture would send tremors 
through the City and the wider 
world. No other Minister to any 
of her administrations >»»« been 
in such a position of strength. 


among etheR, two FcevIsasPar- 

tr Chairmen, Mr Cedi Parkfatoa 
and Mr Norman TefabiL They 
thought that Mrs Thatcher 
weald succeed in appointing 
Urd Yeung; but preferred same 


.WAS a Balllol sang 
about Mr Peter Brooke, the new 
Chairman nf the Conservative 
Party, t» the tune of the Balls «f 
Mon trauma. The first verse 
went ”1 mu foe weighty Imperi- 
ous Peter Brooke, And te my vir- 
tues Em not blind. I have leader- 


shlp,if not initiative, And a first 1 

rate fourth dam mind." 


1 had remembered foe last fine 
as being: -A fourth rate first 
darn mind", an altogether sharp- 
er phrase that can be applied to a 
number of people one comes 
across, perhaps especially top 
dviK servants of the elder sctoioL 

Mr. Tom Braun, the author of 
(he words and now Dean of Mer- 
ton, assures me, however, that 
"ficst rste fourth class' was what 
he compelled and that Mr Brooke 
did indeed get a fourth: u rare 
distinction. 

Yet it to not at all true that the 
new Chairman was plucked from 
now here after Lord Yeung had 
tamed down the job because he 
was not to be sinewed to combine 
it with the full panoply of his 
pewere as Secretary of State for 
Trade and Industry. Mr Brooke, 
after all, was already Psyauster 
General, one of the closest posts 
to the Cabinet without being In 
It. He was also a favoured choice 
of Chancellor Lawson 



the Thatcher 

canid not feasibly sack 

one else. Mr Brook fitted the hQl 
admirably. 

Mr Braun says that by describ- 
ing him as 'imperiotu' he really 
me an t 'genial*. Mr Breaks Is In- 
deed very genlaL He should do 
the Job well and may be more 
than a stopgap. 

Tnoi dentally , the lUp S StB 

described Hr Brooke’s father, 
Henry, as a contro versi al Home 
Secretary, were a Mt mellow. Be 
was not so much controversial as 
accident-prone. Practically ev- 
ery single problem that could 
foil Into a Homo Secretary's lap 
foil into his. Without him, the 
television progr a mme That Was 
The Week That Was weald never 
have been as lively. 

Mr Tasty Bonn records in his 
diaries watching it at foe labour 
Party Conference in Bridlington' 
in. IMS. It was savage and bril- 


liant in parts, and the 
p o ck e d with labour leaders and 
journalists. Not a stogie anti-La- 
bour Joke was made and even I 
wondered if it had gam toe for." 

Television no longer beho v es 
10» that, net only because it has 
been tamed by the attacks of Mr 
Tebbft, but also because Mrs 
Thatcher** Government Is har- 
der to satirise and there is no eb- 
vtous alternative a dministrat ion 
on the way up. In feet, ft would 
be much easier to satirise a La- 
bour Party thut until u few weeks 
ago reftised to believe that there 
was any real British economic 
gro w th to speak oL but has now 
accepted that it may bo 4 per cent 
this year and has started to criti- 
eim the Chancellor for saying to 
the Autumn Statement that it 
.'fell to 2M per cent in 2988. 

One of the signs of a Labour 
comeback will be when the Party 
is able effectively to expose the 
G overnment to ridicule. It is not 
there yet. 


THE ANNUAL conference of 
the Confederation of British In- 
dustry is always in danger of be- 
ing let down by the hyperbole of 
its Director General. Mr John 
Bonham, the new incumbent, is 
no exception. He told the con- 
ference in Glasgow this week 
that since that golden day in 
IMP when FogfowH defeated 
West Germany in the World 
Cup, the Federal Republic had 
gone on expanding. In the last 
eight years, be said, tbe West 
Germans "built 750 more mil— 
of motorway than we did." 

Yet anyone remotely alert 
must have noticed by now that 
the British road system is no 
longer all that bad and also that 
West German economic growth 
nowadays has to be seen 
through a microscope. 

There may be bottlenecks and 
a few gaps on the motorway 
map, but road building was one 
of the achievements of British 
Gove rnm en t s when the country 
was down in the dumps. As for 
German growth, it la the lack of 
it that is «wit«i«ig trouble, not 
th, excess. 

The CBI apart, Glasgow revis- 


Baabam; Director General of the 

CM, who is given to hy p erbole 
Red is a revelation. It was the 

first of the great British cities to 

foil into decay and the first to 
begin to recover. The start of 
the revival predates the Thatch- 
er Government A lot of public 
money and thought was spent 
on Scotland in the late 1870s 
and. around Glasgow, it has be- 
gun to pay off More recently 
there been a nartoershtp 
between public and private en- 
terprise: the heads of banks and 
industry, of tbe University and 
Scottish TV work with the local 
and regional authorities and 
the Scottish Development Agen- 
cy to achieve civilised develop- 
ment. And it shows. Glasgow is 
recovering its self-confidence: 
not yet the Munich of the north, 
but coming along 

There was an unusual fringe 
event The design people at the 
CBI asked the Glasgow School 
of Art to organise a live seminar 
to show delegates the impor- 
tance of design. Tbe first proj- 
ect put up was how to provide a 
new corporate image for the 
TUC. That was dismissed as in- 
appropriate for a CBI confer- 
ence So the Manpower Services 
Commission stepped in at the 
last and asked for ad- 

vice on a corporate image for 
the new 

as Lord Young ii 
the MSC must be called in fu- 
ture. 

Designers and art students 
alike were appalled at the new 
title and said that designers 
should have been brought in at 
the start before being landed 
with an impossible brief The 
brief bad Lord Young written 
all over it: "five major thrusts 
and eight major strategic objec- 
tives.' 

After preliminary discussion 
we were divided into three 
groups to come up with ideas. 
The results were astonishingly 
good. Both the professional de- 
signers and the representatives 
from the MSC were kind enough 
to say that we had achieved m 
three hours what would have 
taken a Government depart- 
ment and a private agency sev- 
eral weeks. I shall watch with 
interest what the Training Com- 
mission comes out with when it 
is formally launched daring the 
middle of next year. 


Training Co; 

Young is determined 


Tbe UK Economy 

The misleading events 
of October 

By Andrew Britton and Simon Wren-Lewis 


THE BRITISH Chancellor, Hr 
Nigel Lawson, has been quick to 
blame the Americans for the 
world crisis, but the stock mfjte 
tot in this country was also ex- 
cessively buoyant Very real im- 
provements in industrial 
performance and profttability 
were exaggerated by market ex- 
uberance and by political pos- 
turing around election time. 
Awakening from tht« dream is 
an unp le asant experience - bat 
not necessarily, in the longer 
term, a damaging one: 

The immediate effect of tbe 
stock market crash is the de- 
struction of wealth. Tbe value of 
that wealth may have been 
based on illusory optimism, but 
it was real enough to the indi- 
vidual owners of shares. Some 
individuals and firms will now 
be more concerned to save, less 
willing to consume or to Invest 
than they were a few weeks ago. 
The scale of the effect Is diffi- 
cult to estimate exactly, but 
econometric work has been 
done which helps to establish 
broad orders of magnitude. 

Economic forecasters in 
France, Germany and other Eu- 
ropean countries seem to agree 
that the direct effect on spend- 
ing this side of the Atlantic will 
be limited, perhaps almost neg- 
ligible. Equities are only a 
small proportion of personal 
wealth in Europe. Even in the 
UK. where holdings of equities 
are more important, they are in 
the main still seen as long-term 
investments to be realised only 
in special need or on the death 
of the holder. The relationship 
we at the National Institute nse 
to forecast household consump- 
tion takes the value of personal 
sector financial assets into ac- 
count, but the effect of wealth 
on spending is a slow response 
spread over several years. Even 
now, the impact on spending of 
the doubling in UK equity 
prices between 1962 and 1986 is 
not yet folly evident 

One cannot be so sanguine 
about tbe prospects for the 
American economy. As direct 
ow n ership of shares is more 
widespread, the effect on con- 
sumption U expected to be lar- 
ger; onr estimate is that con- 
sumption will be reduced by 
about to per cant next year. 

Prospects for the growth of 
the world economy next year 
must be less buoyant than they 
were u few weeks ago, but tbe 
change should not be exagger- 


ated. We still expect the growth 
rate of the main industrial 
economies to average over 2 per 

cent 

In some respects the prospect 
la actually improved. Interest 
rates are now less likely to rise, 
more likely to fell The trigger 
for the stock market collapse 
was a realisation that the au- 
thorities in Germany and Japan 
seemed prepared to see a rise 
in their snort-tens interest 
rates, and tbe US would at least 
have to follow this if the dollar 
was not to collapse. If a general 
rise in world interest rates had 
occurred, a recession in the 
world economy would have 
been possible. However, the 
stock market foil has stopped 
that process in its tracks, and 
US interest rates have follen 
back significantly compared to 
three weeks ago. 

The German and Japanese au- 
thorities have been slower to 
react Even the UK seems reluc- 
tant to move interest rates down 
decisively. The two to per cent 
cuts that have been made are 
probably insufficient Public 
lectures about the American 
economy are no substitute for 
effective policy action at home. 
Given a realistic judgement 
about US policy action, the dol- 
lar target under the Louvre ac- 
cord was too high. We at the Na- 
tional Institute had therefore 
been expecting the dollar to foil 
again; bopefolly this experi- 
ence will reduce inflationary 
concerns in Germany and Japan 
and so bring their interest rates 
back down again. It is widely 
believed that interest rates in- 
fluence demand, especially in 
America, but also in other in- 
dustrial COlIBt rieS, ini*biinin 
the UK. 

So for as Britain is concerned 
we are not revising down onr 
forecasts of 2 to 2to per cent 
growth next year. Other fore- 
casters, including it seems the 
Chancellor, are moving their 
forecasts down Into line with 
ours. We have not shared the 
excessive optimism of which 
stock market over-valuation was 
a symptom. Clearly we most 
take account of the effects of the 
stock market foil on consumer 
spending and on exports. But 
there are other recent develop- 
ments, of at least the same im- 
portance, that point in the other 
direction - towards stronger 
growth rather than weaker. 


The news about the British 
economy has almost all been 
good for several months now. 
Output levels in the first half of 
the year hive been revised up- 
wards; the indicators for the 
third quarter are also encourag- 
ing. The message Is a consistent 
one, whether one looks at the 
labour market with unemploy- 
ment foiling fort and vacancies 
rising, or at consumer spending, 
or at the trade statistics. Ex- 
ports continue to rise strongly, 
as do imports. Higher imports 
may spell trouble on the bal- 
ance of payments in the longer 
term, but they are also a pointer 
to growth in the borne market 
Rapid growth through 1987 al- 
most ensures a considerable in- 
crease in 1988 year on year. The 
latest survey results from the 
CBI are particularly encourag- 
ing, suggesting higher invest- 
ment spending and an increase 
in employment All this pre- 
dates the 'events of October*, 
but it Is still relevant to the 
prospects for next year. 


The British economy is a very 
open one. But our exposure now 
is to Europe rather than to 
America. The success of our ex- 
ports over the past year owes 
much to the advantages of a sta- 
ble and competitive exchange 
rate against European curren- 
cies. The rise of sterling against 
the dollar, and the continuing 
uncertainty surrounding that 
rate, have mattered much less. 
Indeed a higher rate of sterling 
against the dollar is helpfol in 
reducing inflation and in main- 
taining the growth of real in- 
comes in Britain. 


A new factor has been intro- 
duced into economic forecasts 
and their uncertainty is in- 
creased. We are reassured, 
however, by the reports we hear 
or read from those most closely 
involved in British industry. 
They say, with one accord, that 
nothing has happened to justify 
reducing the value of their com- 
panies by a quarter or a third. 
That Is surely correct, although 
one must add that the for great- 
er rise of the preceding five 
yean may not have been alto- 
gether justified either. 

Andrew Britton is the Director 
and Simon Wren-Lewis is in 
charge of world econo m y forecast- 
mg at the National Institute of 
Economic and Social Research in 
London. 





Electricity - . 

price rise 

AomlfrD.Goeh 
' Sir, The Energy Secretary’s 
announcement of forthcoming 
increases in the cost of electric- 
ity to the consumer has been re- 
lated, inter ofiq, to the need to 
provide for tile fending of for 
feure capital investment pro- 
grammes. If there is any truth in 
this suggestion then it sadly 
perpetuates the policy of state 
industries, by which today's 
customers are made to pay for 
the capital fending require- 
ments of ftitare generations of 
consumers. 

Given that many people 
would like to see an element of 
private sector investment in feq 


:-BP. 

implicit in- a fell scale 
sell-off of the generating sta- 
tions - perhaps we ought to con- 
sider a different approach to 
privatisation. If the present as- 
sets of the CEGB were to be 
transferred to a new public lim- 
ited company, with the Trea- 
sury holding the resultingxhare 
capital in the form of fixed divi- 
dend preference shares, then 
the private sector investment 
institutions and private inves- 
tors could be invited to sub- 
scribe for a new issue of equity 
ahakes to provide the fe ndin g 
tor feture capital investment 


capital str uct ure would 
re the following advantages: 

New capital expenditure 
•grammes would not have to 
fended by the present geuer- 
>n of consumers. 



heeded spur to efficiency. 

(3) It would avoid the 1 

of the existing felly ifl— = 

gen era ting and distribution sys- 
tem by creating pseudo-compet- 
ing regional companies. 

(4) The Government’s retention 
of an ownership stake would 
mitigate the problems that 
might be encountered in the 
capital market* because of the 
unclear stations, Logie dictates 
that they should remain Within 
the overall generating system. 

(5) Future private sector fend- 
ing would take new Investment 
programmes out of the FSBR 
ball game. 

Over the years, the private 
sector equity element would be- 
come more significant and it 
might, therefore, be necessary 
to give the state’s shareholding 
a 'golden voter - bat this is not 
creating a precedent 
Desmond Goch, . . 

4 Paddock Wood, 

Barpenden, Herts. 

A blow to 
manufacturing 

From the Director General the 
'British Forging Industry Associa- 
tion .... 

Sir, Hie shock announcement 
of an electricity price increase 


.ofraaioT tf r.nt jv*.- — »r-;!cq 

Letters to the Editor 


of between 8 and 9 per cent nest 
April, and a probable ferther 8 
per cent in 1989, will deal ■) 
body blow to UK manufacturing 
industry at a time when it has 
jnst- begun to recover strongly 
after years of recession. It 
shows a total lack of apprecia- 
tion of the heed for a partner- 
ship between government. In- 
dustry and the financial 
institutions, such as exists in 
Germany and Japan. - 

If a nationalised industry, or. 
any industry for that matter, Isl 
running its affairs properly, it 
does not suddenly discover that 
its -power stations are antiquat- 
ed and that 19 new ones have * 
be built Such projects are lc 
term and have to be financed 
an annualised basis. If a mem-] 
bar company In my association 
put its prides up by 9 per cent 
in order to finance , a. ntneb! 
needed state-ofthe-art - press, 
its customers would very quick-* 
iy toll it what it could do until its. 
products, and source them else- 
where. 

The Government and the na-, 


tionalised electicity industry 
cannot escape responsibility for 
this major blu 


hinder. Mr Lawsom 
says blindly that electricity is 
lust one small part of industry's 
costs.' Does he not know that in 
our now .efficient and profitable 
steel works, electric are far- 
naces account for 25 per rent of 
total costs? A special steels pro- 
ducer, such as United Engineer- 
ing Steels, currently spends 
fSSm in electricity: where does 
he imagine the additional £5m 
is to come from after tire in- 
crease? 

So, thank you Mr Lawson and 
Mr Parkinson for this latest 
ece of crass stupidity from a 
1 allegedly giving 
priority to containing 
on. It really does make 
one wonder whether those who 
took this decision care whether 
British ' manufocturing goes 
down tire tube or not 
D. A. T. Fowls, 

BflA, Groce BUI House, 

245 GrooeLane, Handsvorth, 
Bimtingkam,B202HB. 

Tsarist 

bonds 

Ftom MrJ.Oibach ■ ■ 

Sir, Those Russian bondhold- 
ers who have received no inter- 
est for TO years are no doubt 
gratefel to receive 10 per cent of 
the fece value of the bonds. L 
presume the Revenue will at* 
tempt to obtain capital gains tax 
despite the feet that there is a; 
clear loss of 90 per cent of that 
fece value and the totality -ini 
some cases - of the 3, 4% and 9 
per cent - interest originally 


promised by the Russian Gov- 

A tax amnesty seems called 
for. 

(John Orbach, 

Small’s Farm, 

Horsmondcn, Kent 

Piggottand the 
taxpayer 

From. Ur F. Decks 
Sir, I mast take issue wife Mrs 
M. Beale when she states Lester 
Piggott "never stole from any- 
one" Getters, October 31): Along 
wife other PAYE taxpayers I 
presume that I have bad to pay 
an extra share of the tax burden 
because of bis dishonesty (and 
feat of others of his Ilk). I there- 
fore have no doubt that he has 
stolen from me in this respect 
Mr F. Decks, 

27 Institute Rood, 

Marlow, Bucks . 

Education in 
Hong Kong 

From fee 
err. Bong 
fice 

. Sir, With reference to a letter 
by Mr I Schwarts about student 
needs in Hong Kong (October 
27), a strong technical universi- 
ty with close links to industry is, 
in feet, in the process of being 
established. The Hong Kong 
University of Science end Tech- 
nology is expected to have its 
first intake of students in 1991 
and to have an ultimate intake 
of lfiOOft The university will 
provide for teaching and re- 
search particularly in science, 
technology, engineering, man- 
agement und business studies 
and assist in fee economic and 
social development of Hong 
Kong The establishment of fee 
unive rsity, at a cost of 
HK¥22bn, has been cited by in- 
dustrialists as a massive vote of 
confidence in the fotnre of 


location in Hong Kong Is 
given the largest share of Gov- 
ernment expenditure, repre- 
senting 18 per cent of the annu- 
al budget. There is already an 
integrated and comprehensive 
system of technical education 
and industrial training to meet 
fee needs of Hong Kong as a 
leading mannfeptnWng and ’fi- 
nancial centre. There are also 
two polytechnics with about 
80,000 students, eight technical 

institutes with more than 60,000 
students and 11 industrial train- 
ing centres. 

Paul Brown, 

6 Grafton Street, Wl. 


MPs 

From Mr PJtercer 

Sir, Speaking about the row 
over plans to appoint CND 
members to tbe Commons Se- 
lect Committee on Defence, La- 
bour KP Mrs Joan Ruddock is 
quoted as saying: 'Any sugges- 
tion that people should be ex- 
cluded because of their politi- 
cal views is profoundly 
anti-democratic.* Tbe case for 
exclusion, however, has nothing 
to do with democracy. 

During the election campaign, 
we were told that although the 
Labour P ar l y was anti-nuclear, 
it nevertheless supported fee 
North Atlantic Alliance. The 
CND, bowever, not only advo- 
cates One-Sided dlmnninnwit 
but also wit h draw a l from Nato. 
If Labour’s commitment to the 
Alliance la sincere, why is it so 
keen to appoint two staunch op- 
ponfints to committee? 

Daring her time as CND 
chairman, Mrs Ruddock made 
her view absolutely clear when 
she attacked Peter Shore for 
"makin g oblique references to 
fee Soviet threat without prop- 
er analysis as to why such a 
threat arises and how it might 
be dispelled.* In her opinion, 
she told the Morning Star (Sep- 
tember 7,- 1980: The threat 
comes from the United States 
having made Europe fee front 
line in the conflict with fee So- 
viet Union.* 

If Mrs Ruddock really does re- 
gard fee United States rather 
than the Soviet Union as the 
main threat to the UK, the Min- 
istry of Defence has very good 
grounds indeed to be suspicious 
ofCND-cupportingXP*. 

Paul Mercer, 

33a Baxter Gate, 

Loughborough, Leicestershire. 

In support of 
the DTI 

From Mr W. Barlow 

Sir, I wish to correct a serious 
misquotation (November 4) of 
my speech at the CBI Confer- 
ence on the subject of industry 
and Government relations. 

I did not criticise the Depart- 
ment of Trade and Industry. In- 
deed, quite the contrary. 2 was 
speaking in its rapport as I said: 
Th my opinion this needs a 
strong Department ofTrade and 
Industry, which can fight eases 
for industry with fee Treasury, 
(from whom so many contribu- 
tions seem negative), the For- 
eign Office, the Dep artm ents of 
Environment, Energy, Trans- 
port, Education -and the other 
great offices of state. It is really 
not effective for us to be tack- 
ling all these different minis- 
tries individually as individual 
companies.' . 

Thus my intention was to 
speak in support of fee DTI I 
certainly was not speaking in 
criticism of it 
Wjgtam Bartow, 

BICCplc, Devons hir e 
Bouse, Mayfair Place, W2Z. 



On 1 January 1988 major Customs changes 
take place throughout the European 
Community: 


• A new Integrated Customs Tariff will be 
Introduced -You will have to reclassify all your 

exports and imports. 

• A new Customs export and Import form 
(the Single Administrative Document) will 
replace afl current customs freight declaration 
. . forms in the European Community 

AfoW delays to your goods in the New Yean 
Ensure that your company is prepared for 
1 January 1988 -Contact HM Customs and 
Excise none 



Write to: 

Customs 88 Project, Dorset House 
Stamford Street, London SE19PS 
ortelephone: 
01-9280533 



HM Customs 
and Ex coo 



TROLLOPE & COLLS 

CONSTRUCTION 


01-377 2500 


FINANCIAL TIMES 


Friday November 6 1987 


SAAmake 


S A A 


0 


, SOOTH M/mSMi MMK8 . 


South Africa sets free veteran ANC man 


MB GOVAN MBEKI, second-in- 
command to Mr Nelson Mandela 
and veteran of the African Na- 
tional Congress (ANC), was re- 
leased by the South African Gov- 
ernment yesterday after 23 years 
in Bobben Island prison. 

This followed a review of Us 
ease ordered by President P W 
Botha. It is widely seen a test of 
reaction within the black com- 
munity aid among right-wing 
whites to the eventnal release of 
Mr Mandela and other jailed 
leaders of banned org anisa tions 
such as the ANC and the Pan Af- 
ricanist Congress CPAC). 

Mr Hbeki, who emerged an- 
bowed and unrepentant, was one 
of eight ANC men jailed in 1964. 
He was the first of seven black 
prisoners to be released uncon- 
ditionally. 

Mr Dennis Goldberg, a white 
communist, was released two 


BY ANTHONY ROSIN SON IN JOHANNESBURG 


years ago after accepting Gov- 
ernment conditions that he pub- 
Ucally-reponnce violence. 

Despite Government assur- 
ances that Mr Mbekt was being 
released unconditionally, a Gov- 
ernment official said that, al- 
though he would be free to do 
whatever he wanted, he could 
not be quoted in South Africa be- 
cause he was a communist. 

Asked to define his present po- 
sition, Mr Mbeki said be was still 
a communist s till embraced 
Marxist views. *1 am a member of 
the ANC. The Ideas for which I 
went to jaD and for which the 
ANC stands, I still embrace,' he 
added. 

Mr Mheki said he had spoken 
with Mr Mandela yesterday who 


agreed to his release but gave no 
farther details at the press con- 
ference, where he appeared in 
good faaiiK bnt troubled by the 
bright lights. 

last year, the 77-year-old lead- 
er had an operation for eye cata- 
ract*. The Government cited Us 
advanced age and foiling health 
as eontpasslonate grounds for his 
release. In an attempt to head off 
a possible right-wing white 
backlash to Hr Mbeki's release 
that of four other black polit- 
ical prisoners, the action was 
counter-balanced by the release 
of two white former members of 
the far right Afrikaner Resis- 
tance Movement (AWB), Mr Ja- 
cob VUjoen and Hr Hendrik Ja- 
cobs* who were jailed In 1983 for 


plotting to Ull Bishop Desmond 
Tutu and United Democratic 
Front (UDF3 patron, the Her Al- 
lan Boesak- 

Two of the four black men re- 
leased with Mr Mbeki were fol- 
low members of the ANC. 

Mr Walter TshlMla and Mr 
Tom "hi were jailed in 1978 
for killing a white secu r i ty man 
while frying to hide arms in a 
warehouse. The other two are 
members of the rival PAC which 
split from the ANC la 1959 in op- 
position to the ANCs mm- racial 
policies. The qdit led to develop- 
ment of the Black Consciousness 
movement in the UN’s and re- 
mains a divisive foctor In black 
politics. 

The two PAC men released 
were Mr Jeha NfereL jailed since 
1983, and Mr Michael Mataobmw, 
jailed for 15 years in flic 1978 
Debnas treason trial. 


A token of Pretoria’s confidence 


THE RELEASE of Mr Mbeki can 
be seen as a token of Pretoria’s 
confidence that the ANC is no 
longer strong enough to chal- 
lenge the Government's re-es- 
tablished control over the black 
townships. 

Release of the ailing 77-year- 
old former national chairman of 
the ANC and secretary of the 
high command of its military 
wing, Umkhonto we Sizwe 
(Spear of the Nation), will be 
presented by Pretoria as a hu- 
manitarian gesture. 

But the moral victory argu- 
ably goes to Mr Mbeki, who like 
Mr Mandela and other jailed 
leaders, refused for years to ac- 
cept Pretoria's repeated offers 
of conditional freedom. 

Such offers were accompan- 
ied fay demands for the renunci- 
ation of violence and, by exten- 
sion, the entire ANC strategy of 
revolutionary overthrow of the. 
'apartheid regime.' This strate- 
gy was laid down by the clan- 


destine leadership, including 
Mr Mbeki, in the early 1960s. 

It was the ANCs response to 
the Government’s banning of 
both the ANC and the Pan Afri- 
canist Congress in the after- 
math of the 1960 Sharpeville 
massacre. 

Mr Mbeki, who was bora the 
son of a chief in the Nqaxnakwe 
district of the Transkei in 1910, 
joined the ANC in 1935 while a 
student at Fort Hare University. 

During his student days, he 
forged a lifelong attachment to 
communism. He was influenced 
both by the mainly white intel- 
lectuals of the South African 
Communist Party and by Mr 
Max Yeargan, a black American 
Communist 

Along with other opposition 
leaders, Mr Mbeki was detained 
for five months after Sharpev- 
ille. Shortly after his release, he 
formally joined the now clan- 
destine South African Commu- 
nist Party and in December 1961 


was arrested under the Explo- 
sives Act 

He went underground after 
being acquitted on a technicali- 
ty in 1963, and became a found- 
er member and secretary of the 
Hi gh command of Umkhonto. 

In July of the same year, he 
was arrested with other leaders 
at Umkhonto’s headquarters, a 
Cum at Rivonia outside Johan- 
nesburg. Alongside Mr Nelson 
Mandela. Mr Walter Sisulu and 
other leaders, he was given a 
life sentence for sabotage. 

As number two in the ANC hi- 
erarchy, Mr Mbeki assumed the 
leadership mantle os Robben 
Island when Mr Mandela was 
transferred to Pollsmoor Prison 
on the mainland in 1982. 

Like Mr Mandela, and others 
of his generation, Mr Mbeki is a 
mythical, symbolic figure of re- 
sistance to millions of blacks. 

His release will be welcomed 
in itself and as a pointer to the 
eventual release of Mr Mandela 


and other jailed leaders. In 
many ways, Mr Mbeki's release 
is a trial run. 

After a ruthless war fay Preto- 
ria against ANC cadres at home 
and abroad, the harassment and 
detention of United Democratic 
Front and other anti-apartheid 
forces in the churches, trade 
unions and community associa- 
tions, the Government and secu- 
rity forces will be watching 
closely. 

Mr Mandela and other jailed 
leaders could also soon regain 
their freedom, provided Mr 
Mbeki's welcome back into the 
black community takes place 
without disturbing the relative 
order established after the loss 
of more than 2,500 black lives 
daring two years of violent pro- 
test 

The stage would then be set 
for a fresh attempt at a negoti- 
ated settlement to South Afri- 
ca’s black-white impasse. 


BP share 
buy-back 
commences 

By Richard Tomkins in London 


THE BANE of England’s offer 
to . buy-in British Petroleum’s 
newly-issued shares at 70p each 
will open today with a low-key 
advertising campaign aimed at 
avoiding a widespread take-up 
of the offer by small investors. 

Contrary to earlier indica- 
tions, the Bank will buy the 
shares direct from the public 
rather than through the market- 
place, so no dealing costs, taxes 
or duties will be charged. 

Investors, whether institu- 
tional or private, will be able to 
sell shares by filling in a form, 
to be published discreetly in 
certain newspapers, and send- 
ing it to the Bank with their ren- 
o uncable letter of allotment 

The terms of the buy-back ar- 
rangement were first outlined 
last week after the stock market 
crash caused BPs £7.2bn 
($12.53bn) share offer to flop. 
The aim was to prevent a panic 
sell-off of the 120p partly-paid 
shares when dealings began on 
Friday. 

Initially the shares held up 
fairly welt ending their first 
day at 85p; but Anther falls in 
the wider market have since 
taken them uncomfortably close 
to the 70p leveL 

The Bank fears that with the 
price this low small investors 
might calculate that 70p a share 
net would represent a better 
deal than a higher price accom- 
panied by minimum dealing 
costs of £15 plus taxes and du- 
ties. 

For example, someone with 
the minimum allocation of 80 
shares would need to see a 
price of about 90p before a mar- 
ket transaction became more 
profitable. 

The Bank argues that inves- 
tors would be rash to sell their 
shares for 70p now because the 
agreement will be in place for 
between one and two months, 
and the price might, at a later 
date, be nigh enough to make a 
deal in the marketplace prefer- 
able. 

Therefore, it is conducting a 
low-key campaign aimed at 
wbat it calls the more sophisti- 
cated investor to avoid encour- 
aging large numbers of people 
to cash in their shares. 

• BPs shares yesterday closed 
IVfcp up at 7946p in active trad- 
ing, amid rumours that the Ku- 
wait Investment Office had ac- 
cumulated a 4.9 per cent stake. 


UK raises arts funding by 10% 
and plans ‘incentive’ rewards 


BY ANTONY THORNCROFT IN LONDON 


A SMALL REVOLUTION is 
planned for the funding of the 
arts in Britain. 

- Arts Minister Richard Luce 
yesterday announced that .the 
country’s arts Budget for 1988-89 
is to be raised by 10 per cent as 
part of a three-year programme 
to increase Government spend- 
ing by 17 per cent over the peri- 
od. He would also introduce "in- 
centive fbndinfg' under which 
organisations will receive some 
of their aid in proportion to 
their ability to raise revenues 
by better box office returns or 
by attracting private and corpo- 
rate sponsors. 

The Government hopes that 
by giving arts companies what 
they have long requested - as- 
sured forward flinging to help 
their planning, plus a substan- 
tial increase in aid - this once- 
fbr-all payout will silence the 
vociferous arts lobby. 

The Arts Council, which dis- 
tributes the money to regional 
arts associations and to major 
companies including the Na- 
tional Theatre and the Royal 
Opera House, gets the 10 per 
cent increase, to £150m ($267m) 
for 1988-89. For the following 
two years, however, its increase 
is set at 3 per cent, leaving it 
with £160m to distribute in 
1990-9L 

By then the Government 
hopes that incentive handing 
will be bearing fruit Around 4 



Richard Luce; incentive funding 
per cent of the extra money for 
the Council next year, or£5m, is 
earmarked for an incentive 
scheme which the Council will 
be finalising next week. 

Mr Luke Rittner, 
Secretary-General of the Coun- 
cil, said yesterday he was 'abso- 
lutely delighted" with the grant 
•The important thing .is the 
three year funding. It gives arts 
organisations a breathing space 
in which to adapt to the new cli- 
mate.' 

The British Film Institute 
will receive a 12.7 per cent in- 
crease to £lL3m in 1988-89 be- 
cause of its success in attracting 
sponsors for such projects as 


the Museum of the Moving Im- 
age, which is about to open. The 
aid for the leading national mu- 
seums and galleries is up, from 
£12S.64m to £140.7m, with Indi- 
vidual grants to* be announced 
later. The only losers are small- 
er, local museums, funded 
through the Museums and Gal- 
leries Commission, which must 
get by with increases below the 
likely inflation rate. 

Mr Luce has raised aid to the 
Business Sponsorship Incentive 
Scheme by 70 per cent Under 
this the Government hopes to 
attract new coxnmercal spon- 
sors to the arts by offering 
matching grants. For 1988-89 its 
budget wul be £3m. In three 
years 600 companies have 
helped the arts for the first time 
through the BS IS. 

But in a year’s time, when the 
extra cash has been spent and 
organisations realise that in 
1989-90 they will receive grant 
increases below the likely infla- 
tion rate, the complaints may 
start again. Mr Lace hopes that 
most organisations will build 
up alternative sources of in- 
come, encouraged by his incen- 
tive funding schemes. 

Money for the National Heri- 
tage Fund, which has just re- 
ceived a £20m supplementary 
grant, and the British Library, 
which is being built in Euston 
Road, London, are not covered 
by the Government’s proposals. 


N. Korea to discuss debt 

BY STEPHEN HDLBi. EUROMARKETS CORR ES PONDENT 


A DELEGATION from North 
Korea is scheduled to arrive in 
London in the next two weeks to 
discuss a debt-rescheduling 
package with international 
banks. 

After months of often acrimo- 
nious negotiations, agreement 
was reached in September on 
the broad terms of a reschedul- 
ing accord, soon after the coun- 
try was declared in formal de- 
fault by the banks on its 
commercial debt 

The debt, amounting to 
DM3L4bn C£800m), was lent by 
two bank syndicates, one led by 
Morgan Grenfell of the UK and 
the other by the Australian and 
New Zealand Banking Group, in 
the early 1970s to the Foreign 
Trade Bank of North Korea. 

The agreement called for a 


spreading out of repayments 
over 12 years. Mr Richard Hal- 
crow, director at Morgan Gren- 
fell, said the banks expected 
the delegation to arrive in Lon- 
don in the next 14 days. 

The North Koreans have re- 
cently indicated that they are 
seeking "new loan negotiations.' 
Mr Colin McAskiU, their Lon- 
don representative, said that 
the suggested wording of the 
loan documentation was the on- 
ly matter at issue. 

They are understood to have 
expressed particular concern 
about provisions for a guaran- 
tee. It is not clear whether this 
means the pro p o sa l for an ex- 
plicit state guarantee, or a pro- 
vision calling for North Korean 
to deposit gold in an escrow ac- 
count to fluid the repayments. 


$ falls despite 
intervention 


Continued from Page 1 

US foiled to reduce its budget 
deficit 

Before interest rates were cot 
the franc was trading close to its 
prescribed limit within the 
EMS of FFr3.43 to the D-Mark, 
but strengthened to around 
FFKL37 soon after. 

The Swiss National Bank cut 
the bank rate from from 3J5 pot 
cent to 3 per cent effective to- 
day. 

Since the US currency came 
under renewed selling pressure 
towards the end of the first 
week of the stock market crisis, 
the dollar Han fall en against the 
D-Mark by nearly 7 per cent, the 
yen by almost 8 per cent and fixe 
pound by almost 7 per cent 


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US-UK relations clash 

Continued from Page 1 


the budget deficit in both fiscal 
1988 and fiscal 1989 and be of 
such a composition as to cany 
conviction in the markets. ■ 

Mr Lawson was more explicit 
than before in stating the desir- 
ability of such a meeting if 
there was US action. But he 
warned that if such an agree- 
ment was not in place, the hold- 
ing of a G7 meeting could have 
'a devastating^ counter-pro- 
ductive effect on world mar- 
kets. 11 

He said he would continue to 
keep UK interest rates careful- 
ly under review, and when he 
decided the fiscal stance in the 
spring budget he would takeful- 
b into armnnt the lifeefrv effects 


of the recent stock market col- 
lapse 1 

Labour leaders attac ke d the 
Government for being too com- 
placent Mr Kinnock said that 
by putting so much stress on re- 
ductions in the US budget defi- 
cit the Government was ' makin g 
the White House discussions 
with Congress the arbiter of 
British economic policy” 

The economic debate was 
overshadowed by a series offb- 
rioos exchanges in the manner 
and subtlety of seasoned heavy- 
weight boxers as Mr Smith 
sought to counter-attack follow- 
ing Mr Lawson’s commanding 
of the past 20 


Memory 
chip 
moves 
win US 
welcome 

By Loufee Kehoe in San 
Ran cisco 

THE MOVES this week by the 
US and Japanese governmc 
to ease -semiconductor trade 
tensions have won broad ap- 
proval in the US from both 
semiconductor buyers and us- 
ers. 

Although the moves affect on- 
ly one aspect of the protracted 
trade dispute - alleged Japa- 
nese memory chip dumping 
they represent the first substa: 
tiai p rogre ss towards resolving 
the row since the signing of the 
US-Japanese semiconductor 
trade agreement last year. 

Under the pact, Japan agreed 
to end dumping of memory 
chips worldwide and to open its 
market to foreign chip suppli- 
ers. US officials say there has 
been little progress on the mar- 
ket access issue, but that dump- 
ing has stopped. 

This week the Japanese Min- 
istry of International Trade and 
Industry (MitT) promised to end 
memory chip production con- 
trols and the floor prices im- 
posed after the aigwwg of the 
agreement to halt dumping. The 
US has strongly objected to 
these measures, which it claim* 
violate the agreement 
President Reagan suspended 
$84m in punitive foriffo im- 
posed on Japanese computers 
televisions and power tools last 
April in response to Miti’s state- 
ment and to evidence from the 
US Commerce Department that 
Japanese memory chips were 
no- longer being damped below 
*feir value' in third -country 
markets. But $165m in tariffe 
related to Japan's alleged fail- 
ure to open its markets, remain. 

The Uiti announcement was 
welcomed particularly by US 
chip buyers. "Many of our mem- 
ber companies have reported 
that they haven't been able to 
purchase needed semiconduc- 
tors because of alleged produc- 
tion controls by Miti," said Mr 
William Krist, vice-president of] 
international trade affairs at 
the 3,700-member American 
Electronics Association. These 
availability problems were 
causing real injury." 

US chip makers also gave "foil 
support* to President Reagan's 
decision -and h filled US' the ap^ 
parent success of trade negotia- 
tors in persuading Miti to end 
memory chip production con- 
trols and floor prices. 

"Our interest is in selling 
more of our products in Japan, 
in avoiding a repetition of Japa- 
nese dumping and in our cus- 
tomers being satisfied that they 
are not being adversely affected 
by Japanese measures imposed 
in the name of the semiconduc- 
tor agreement,* said Mr Irwin 
Federman, chairman of the 
Semiconductor Industry Associ- 
ation (SIA), the US semiconduc 
tor trade group. 

For the US chip makers it is 
important to maintain customer 
support in their trade battle 
with Japan. Recently, however, 
this "alliance* has been threat- 
ened by Inc reasing concerns 
over chip shortages. 

Miti’s promise to end memoir 
chip production controls wifi 
liefcly ease chip shortages in 
e US and may bring lower 
prices, industry analysts say. It 
also demonstrates, however, 
that Japanese companies still 
control a large portion of the 
memory chip market 
US chip makers have not re- 
entered the market for dynamic 
random access memory (Dram) 
chips, in spite of rising prices 
the wake of the trade agn 
ment Texas Instruments re- 
mains the only significant US 
Dram supplier. 

But US memory chip makers 
(including those producing oth- 
er types of memory chips) have 
benefited from the trade pact, 
the SIA claims. Because of 
higher prices they have been, 
able to remain in the market 
and they have raised capital in-' 
vestment in memory chip prod- 
ucts since sanctions were tm- 


The SIA says US companies 
hold a 9JS per cent market share 
in Japan, compared with 8J> per 
cent before the imposition of | 
sanctions in April. The afoocia- 
tion claims, however, that they 
should hold an IX per cent 

share if the pact, which 

ised foreign suppliers 20 per 
cent in five years, were being 
flilly implemented. 

The US industry rejects Ji 


nese data that suggests 
gains. "The Japanese monitor 
chip purchases by 84 companies 
that represent about 75 per cent 

of the market, but the rest of the 
market - mostly smaller compa- 
nies - buy fewer foreign chips,* 
an SIA official explained. US 
data is based on sales that cover 
about 95 per cent of US chips 
sold in Japan, he said. 

US semiconductor industry 
executives acknowledge that 
the 'numbers game* being 
played by Japan and the UB 

may be futile. 

"What we are really looking 


mg-M 

mitments from Japanese cus- 
tomers willing to design US 
chips into their new products,* 
one of the largest chip 
That, he says, will re- 
quire a big shift in Japanese 

thinking- 


Japan hangs on, page 8 


THE LEX COLUMN 



the dollar down 


Upheavals in the world’s secu- 
rities markets took a back seat 
yesterday as attention switched 
to the foreign exchange mar- 
kets, where the US dollar 
plunged to record lows against 
.the currencies of most of its mar 
jor trading partners. European 
efforts to stem the dollar’s free 
fall, by trimming local interest 
retes, were quickly shrugged 
jaside as the markets reacted 
with increasing alarm to the US 
Administration’s erratic policy 
statements. 

The noises coming out of 
Washington yesterday only 
strengthened the market’s sus- 
picion that the US Government 
has lost control of the situation. 
The US Treasury Secretary’s 
widely publicised -remarks that 
he would risk a foiling dollar, if 
necessary, to avoid a recession, 
were quickly followed by a reaf- 
firmation of the US commit- 
ment to the Louvre accord and 
the maintenance of exchange 
rate stability. Since the stock 
market collapsed just over a 
fortnight ago, the dollar has 
dropped by. almost 7.5 per cent 
against the D-Mark Any sugges- 
tion that this will somehow help 
stabilise the world's nervous 
stock markets is, to borrow Mr 
Lawson’s Mansion House 
phrase, 'manifest poppycock*. 
After all, it was the apparent 
breakdown of the Louvre agree- 
ment which played a key part in 
triggering the Wall Street col- 
lapse. 

Against this background, the 
signs of a co-ordinated Europe- 
an effort to lower interest rales 
to help stem the dollar's slide 
went virtually unnoticed. Switz- 
erland did cut its discount rate, 
but the half point reduction in 
West Germany’s Lombard rate 
was largely cosmetic and was 
partially offoet by a rise in 
French interest rates and a foil 
in US prime rates. The dollar's 
swift decline has led to great 
strains within the European 
Monetary System and the 
French action has to be seen in 
this light Meanwhile, yester- 
day's drop In US prime rates on- 
ly served to underline the. fact 
that over the last 2 Vi weeks 
short-term US interest rates 
have fallen by close to 200 basis 
points, or twice tfrfost as West 
German EuroDM rates. . 

West Germany's cautions in- 
terest rate response should be 
regarded as a gesture of good- 
will to the US Administration. It 
has shown that it is prepared to 
nudge its interest rates lower, 
but will probably only be pre- 
pared to take the major step of 
trimming a half point off its dis- 
count rate if the Americans can 
prove that they have the politi- 


3-month Euro 
currencies 



4-q%; 


poin 

lost 


October 1987 Nov 


cal will to cut their budget defi- 
cit Any efforts by the G7 to 
mount a support operaUob for 
the dollar before the US has 
shown Its hand In this regard 
would be foolhardy. Meanwhile, 
the London equity market again 
showed its domestic preoccupa- 
tions yesterday, rising by 30 
inta on a day when the dollar 
nearly 3% cents against 
sterling. With splendid incon- 
sistency, it even produced 
strong rallies in US-exposed 
stocks such as Cookson and ICL 
There may be truth in the no- 
tion that market volatility has 
transferred itself from equities 
to foreign exchange, bnt there 
can stilfbe vicious swings in in- 
dividual stocks. ICI and Glaxo 
both produced movements over 
the day of more than 5 per cent 


BP 

The BP flotation is not yet out 
of the woods, especially if yes- 
terday’s rumours about massive 
Kuwaiti purchases prove true. 
The BP management may have 
wanted their shares to be more 
widely held overseas, bnt not in 
such large chunks, nor indeed 
at such artificially depressed 
prices. The Government’s 
much-applauded decision to go 
ahead with, the sale could end 
op looking like obstinacy, espe- 
cially by contrast with the West 
German postponement yester- 
day of the Volkswagen issue. . . 

’ On the other hand, , the Bank 
of England rescue plan looks 
more and more cunning on in- 
spection. For the 270,000 mem- 
bers of the public who sub- 
scribed for the offer, the cost of 
selling their 100 or so shares 
apiece would be around 20p. 
Since the Bank's 70p purchase 
price is free of all costs, it 
would therefore pay the small 
shareholder to sell out at any- 
thing under 90p. Were the mar- 


ket price to end up at yester- 
day's close of 80p. the 
Government would be in the 
ideal position of both rescuing 
the small investor and bolding 
on to the cash wrung from the 
underwriters. 

Meanwhile, the refusal to 
specify the length of the buy- 4 
back period, while understand- 
able enough, could become con- 
tentious. lia effect is that the pe- 
riod can be extended if the 
price is low. or promptly fore- 
closed if the price is high. This 
is extremely handy for the 
Bank, but creates something of 
an artificial price for the part- 
ly-paid and arguably for the ful- 
ly-paid as well. The only safe 
conclusion for the market is 
that as long as the price is whol- 
ly dependent on the 70p floor - 
and at present it still seems to 
be -the period will be extended 
for as long as possible. 

Benlox/Storebonse 

Pretty is not the epithet usual- 
ly applied to the work of corpo- 
rate financiers, but a defence 
document for Storehouse had to 
be a designer product. Clearly, 
Storehouse is keeping plenty 
back in its defence in case the 
takeover threat becomes really 
serious. The Benlox bid can be 
readily dismissed as having no 
merit in itself, or much value ei- 
- tber in the stoekmarket of re- 
cent days. 

No doubt it is frustrating for 
Storehouse to be bothered by a 
frivolous bid which requires an 
expensive defence. But that is 
one of the hazards of a public 
quotation, and the best defence 
is to have a trading record too 
good to attract an offer. Thus 
the bid has some benefit for 
Storehouse shareholders if it 
has forced the management to 
examine and explain the pur- 
pose or the combinedgroup and 
to focus attention on solving its 
undoubted problems. In a 
sense, the management is fortu- 
nate not to be pursued by a 
more likely bidder. And Moun- 
tieirfi is plain ludky. given what 
has happened since, that its ten- 
tative offer was turned down. 

The document puts forward 
some fair arguments for keep- 
ing 'the apparently disparate 
businesses together, and Store- 
house can justifiably say that it 
understands the link between 
design and retailing. Yet there 
is still the feeling that the em- 

E ire has been put together too 
asttiy and without sufficient 
thought for retailing practicali- 
ties. The Benlox management 
may not be retailers, but Store- 
house has not yetwholly proved 
its claim to the title either. 



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in the Rough Waters of 
International Financing, 
Rely on Tokai Ban k 

The seas of international finance can get quite stormy. 

That’s why you need an experienced navigator to determine 
. the proper course for your financing and investments. With 
over 100 years of experience, 46 overseas offices, more than 
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We don’t rely on dead reckoning. As one of Japan’s - 
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TOKAI BANK 


WWhl, M*a,n J*Mn tkLUZ 2IM111 lMBJXMX 

Tr-mw mirmin^.mni 






29 




•tali 

S, 


money 

1 Stand No 1264 




QW 


NoSSLJame^tSqun, London SIV1Y4JB 


' SECTION n - COMPANIES AND MARKETS 

TRAVIS & 

FINANCIAL TIMES 

ARNOLD 

Timber. Building Materials, 
1777V Healing and Plumttrtg 
am mr^m Equipmemforiha 

P 'i ■ Construction and Alked 

Friday November 6 1987 

Trades. 

^SttoOflS Northampton 5242*. 


R ^1«L5 


asat 


I ■ 

F 


Telex recapitalises with 
$878m junk bond plan 


BY JAMES BUCHAN M NEW YORK 


x riLB X, the beleaguered US *w«iww 
of computer peripherals and airiine 
reservation systems, yesterday un- 
veiled an S87Sm recapitalisation 
plan as insurance against the fai- 
lure of a higher offer from Mr Ash- 
er Rdelman, the New York investor. 

Tim recapitalisation plan, which 

Will be wholly fmawwrt through 

debt, is the first unequivocal signal 
that flie $150bn . market for low- 
grade corporate securities - known 
as junk bonds - is recovering from 
the blow delivered by the stock- 
market collapse last month. 

Telex stock soared yesterday 
morning bySSft to $57%, In expecta- 
tion that the plan, which has a the- 
oretical value of $60 a share, would 
succee d uniter the firm horyi of 
Drexel Burnham Lambert, the pow- 
erful junk-bond issuer which is Te- 
lex's financial adviser. 


"It shows Diesel can raise m oney 
in ibis market,” said an arbitrageur, 
or professional takeover speculator, 
in relief." 

Telex, which is based in Tulsa, 
Oklahoma, yesterday that the 
plan would be submitted to stock- 
holders S Mr Edehnan drops his 
$85-a-share tender offer. A cloud 
has hung over the Edehnan offer 
since Telex’s stock tumbled in the 
October 10 crash. 

Under the Telex plan, which will 
create f”ie of the US's most highly 
indebted companies, stockholders 
receive S45 in cash and a S15 face- 
value junk bond for each share. 
They also keep the shares, although 
these will be greatly devalued by 
the transaction. 

Telex said Drexel Burnham was 
confident it wwM arrange ^ en- 


tire Btmwiig for tHo recapitalisa- 
tion. Telex expected to cover the 
cash payout and the plan’s ex- 
penses through bonk borrowings of 
$475m and the sale of 5300m in junk 

hpnri^ ,, 

New York’s arbitrageurs re- 
sponded with enthusiasm to the 
cash payout, but were queasy about 
the junk bond on offer, which is of 
the class known to traders as a 
“cramdown." 

The security carries a theoretical 
interest rate of 16.75 per cent, but 
pays the interest only in more junk 
bonds for five years. "It certainly 
isn't worth $15," said one arbitra- 


Mr Edehnan, who is believed to 
have bought about 8 per cent of Te- 
lex {& prices under $50 a share, said 
yesterday that he would extend his 
Sffita-share offer until November 9. 


Shortfall in Trinidad borrowing 


BY CANUTE JAMES IN KMQCTON 


TRINIDAD and Tobago’s external 
borrowing programme of USS220m 
for this year has fallen short of the 
target, forcing the Government to 
increase its exposure in the domes- 
tic money market 

Ur Selby Wilson, Trinidad and 
Tobago’s junior finance minister, 
says that the Government is still 
S5Qm short of its total projected bor- 
rowing for the year of 2303.2m, 
which Includes $833m on the local 
market Local borrowing for this 
year has already reached $95.7m. 

Mr Wilson said; The present ad- 
vene international financial mar- 
ket conditions hove ' ' ndfitated 
against the ability of the Govern- 
ment to sc ar ce its planned external 
borrowing requirements. This has 
necessitated an increase in the 
amouirtoriginalty targeted to be ifo- 
tained from the domestic market" 


Bankers in Fort of Spain, the cap- 
ital, say the difficulty in raising for- 
eign lmwia js linked to a foil in the 
country’s credit rating because of 
foe deterioration of its oil-based ' 
economy over the past three years. 

The Government was successful 
in raising S46JSm through a private 
placement in Tokyo earlier this 
year, but it has since been forced to 
follow this with $40 Jmin a local flo- 
tatten m March, and a central bank 
bond issue totalling $27.7m in Au- 
gust. 

The latest local offering of an- 
other S27.7m in floating-rate notes 
has been oversubscribed, according 
to government officials. Mr Wilson 
said the funds which the Govern- 
ment was writing from overseas 
would be found from export crefot 
facilities of $120Jhn~ which were al- 
readty in ptaoe, while another S50m 


was being sought on the Rnwioilur 
market 

The loans are being sought to 
help reduce an expected increase in 
foe fiscal deficit which reached 
$777m last year, more than twice 
foe deficit which had been pro- 
jected by the Government 

The country’s economy has been 
hit by foe fall in oil prices, with the 
petroleum sector accounting for 80 
per cent of all foreign earnings. 
Revenue, from petroleum for last 
year, projected at just undo- Slbn, 
fell to £445m- Recurrent revenue for 
last year foil to S1.45bn, one-third 
less than 1985 levels. 

. The failure to reach tins year's 
borrowing target led the Govern- 
ment to cut projected spending in 
the first half of this year by 17.2 per 
cent below foe canespoudmg peri- 
od of last year. 


CBS near 
to $2bn 
sell-off 
to Sony 

By Our Naw York Staff 

STOCK IN CBS steadied yest er - 
day after its sharp rise on Wed- 
nesday, but the market remained 
convinced that foe broadcasting 
group was inching towards a sale 
of n record bosmesa to Sony* 
the Japanese electronics group. 

CBS stock lost $V4 to $171 in 

early trading, after its dizzy S6% 
climb on Wednesi-ay, in response 
to statements from both compa- 
nies that the tortuous negotia- 
tions were p roceeding on the 
$2bn sale. Sony rase S% to $2834 
in New York trading. 

. Mr Fred Meyer, CBS chief fi- 
nancial officer, — M that agree- 
ment could be readied by the 
weekend, in time for a CBS 
board nMmimg on November 1L 
*Td say there’s a 70 per cent 
chance that ft wiQ be sold out- 
right, and a 38 per cent dunce 
tint It wont," he said. 

Sony, which has been panning 
the division as a complement to 
its cmnsmner electronics busi- 
ness for more than a year, said 
yesterday that foe price of $2bn 
was not in dispute. The question 
at issue concerned the assets ami 
HahHMas to be indnded in foe 
sale, foe company said. 

“It's a question of what kind of 
balance sheet do we deliver, ” Mr 
Meyer said. 

The CBS records division, 
which has contracts with snch 
performers as MMmmJ Jackson 
and Bruce Springsteen, reported 
operating profits of $L62im on 
sales revenues of $L49hn last 
year. 

Since tin management coop 
that brought Mr Larry ISsch to 
power at CBS in September 1S6S, 
foe gronp has been systematical- 
ly raising cash through foe sale 
of such non-broadcasting busi- 
nesses as its magarine and hook 
publishing operations and a mu- 
sic jmbfisUng dhrUoiL 


Ingersoll pays £60m for 
two British newspapers 


BY RAYMOND SNODOY M LONDON 


UR RALPH INGERSOLL, pub- 
lisher of 38 daily and 150 weekly 
newspapers in the US, yesterday 
bought a controlling inte rest in the 
Birmingham Post and Mail and the 
Coventry Evening Telegraph news- 
papers of the UK from y attention 
Investment Trust The deal is worth 
more than £8Qm (SlOSrn). 

Mr Ingersoll, r biri*”*" and pMrf 
executive of Ingersoll Publications, 
said he believed he was the first US 
newpaper publisher to boy into the 
British industry on such a scale. 

Mr Robert Oise, chairman of Yat- 
tendon, said yesterday the two com- 
panies intended to invest jointly in 
other businesses in both the UK 
and the US- “We are seriously con- 
sidering farther investment in 
newspaper operations in Britain,” 
Mr Ingersoll said. 

Ingersoll Publications has daily 
newspapers in 17 US states includ- 
ing the Trentonian in New Jersey 
and the New Haven Register in 
Connecticut *>wd what is as 


Am eri ca’s largest group of free 
newspapers in the St Louis area. 
Turnover this year is expected to be 

5600m. 

Ingersoll Publications has daily 
newspapers in 17 US states as well 
as one of America's largest groups 
of free newspapers. Turnover this 
year is expected to be 5800m. 

Mr Ingersoll, whose late father 
was a distinguished editor and pub- 
lisher of both Time and Life maga- 
zines, said he did not rule out any 
type of newspaper investment in 
the UK, including national newspa- 
pers. 

The US newspaper publisher in- 
tends to setup a British-based hold- 
ing company for his new interests. 
Mr Iliffe, Mr Tim Morris, rtu»rm»n 
Of foe Bir mingham Post and Mail , 
and Mr Geoffrey Bottman, Yatten- 
don's finance director, would serve 
on the board. 

The deal gives Ingersoll Publica- 
tions, based in Princeton, New Jer- 


sey. control of the Midlands-based 
Bi rmingham Post and Evening 
Mail, the Sunday Mercury and six 
associated weeklies in the Bir- 
mingham area, the Coventry Even- 
ing Telegraph and a large free 
newspaper. 

Ingersoll Publications, which has 

had fmangial hurling from Drexel 

Burnham Lambert, specialists in 
"junk bonds,” is a company noted 
for its cost-conscious style of man- 
agement 

Mr Ingersoll said yesterday he in- 
tended to invest heavily in his Mid- 
lands acquisitions through promo- 
tion and foe reequipping of foe Bir- 
mingham press hall. 

The two companies have been 
talking to each other since the early 
1980s but it may have been Mr In- 
gersolTs expertise on free newspa- 
pers which triggered a relationship. 

The Birmingham Mail is faring 
intense competition from the Bir- 
mingham Daily News - Britain’s 
only free daily newspaper. 


National Steel profits at $24m 


BY ANDREW BAXTER IN LONDON 


NATIONAL STEEL, the three-year- 
old joint venture between National 
Intergroup (Nil) of the US and Nip- 
pon Knifftn of Japan, has "»«fa good 
progress but still has to improve its 
productivity management of 
technology, Mr Howard M. Love, 
Nil ebwwT TMm , said in London yes- 
terday. 

The equally-owned venture made 
net profits of $24m in the first nine 
months of 1987, and will be "signifi- 
cantly in foe black” for the year as 
a whole, said Mr Love. National 
Steel lost S60m in 1988. 

Mr Love is also chairman of Na- 
tional Steel, although Mr Khfciehi 
Hagjwara was appointed last year 

from Nippon Kokan to be president 
and chief operating officer. Hie 
dose to 70 Japanese were now 


working in National's US steel 
plants. 

He paid tribute to the superior ta- 
lents of the Japanese in managing 
technology, and said that over the 
coarse ofthe joint venture the per- 
centage of raw material ending up 
as finished product had risen by 
three or four points to 78 per cent 
Even so, foe venture still had to 
“get itself up" to the 90 per cent lev- 
els achieved in Japan. 

On productivity, the venture 
needed to reduce its man hours pa 
tonne of steel produced from 4J-L2 
to around three to maintain compet- 
itiveness. Achieving this would be 
equivalent to uniting the workforce 
fay 2500, a reduction which would 
be more fo*" covered tor foe com- 
pany's attriti on rate over the next 
three to four years. 


Under toms of the joint venture, 
Nippon Knkwn has right of first re- 
fusal if Nil wishes to sell or spinoff 
its stake, but Mr Love gave no indi- 
cation, contrary to some analysts’ 
ex p ec tations, was likely in 
the near future. 

If foe venture was doing well, he 
suggested, it might be better for 
Nil’s shareholders if foe interest 
were retained. 

Steel, in any case, cow accounts 
for just 14 per cent of NITs assets 
against 80 per cent three years ago. 

Following the $400m sale in 1985 
of First Nationwide Savings, and 
the $343m purchase early last year 
Of FoxMeyer, a Denver-based 
pharmaceutical distributor, Mr 
Love said drugs distribution was 
now NITs core business. 


Income 
surges 
at US 
insurer 

By Deborah Hargreaves 
In New York 

AMERICAN INTERNATIONAL, 
the New York-based international 
insurance group, yesterday posted 
a 31-7 per cent increase in its third 
quarter net income. Aided by a 
weaker dollar, the company said it 
had experienced exceptionally good 
foreign operating results. 

Hurd quarter earnings rose to 
52 32™, or 51.42 per share, from 
S176m, or SI .06 a share in the year- 
earlier period. Earnings per share 
figures were adjusted for a two-for- 
one stock split last November. 

Rev enues for the third quarter 
rose 215 per cent to S2.78bn from 
the level a year ago of $258bn. 

In the nine months period, the 
company reported net income of 
5674.6m, or 54.13 per share, up from 
5454m. or $180 per share in the 
year earlier period. Results were 
boosted fay capital gains of 583m, a 
rise from the 5413m gained in the 
year-ago period. 

In foe first nine months 1 of 1S86 
revenues rose to $8j05bn from 
$8.24bn. 

Mr Maurice Greenberg, Ameri- 
can International's president 
the results reflected “excellent 
gains" in all areas of the company’s 
business. 

Worldwide life insurance opera- 
tions reported a 19 per cent in- 
crease in operating income, largely 
due to the performance of the com- 
pany’s Far East business, he ««M 
However, competition In the 
property-casualty insurance market 
had put pressure on domestic rates. 

The stock market decline, by all 
logic, should stem the downward 
trend in rates given that the indus- 
try, by one estimate, lost SlObn in 
capital since mid-year." The compa- 
ny said the stock market fall hud 
not bad a significant impact on its 
surplus or anticipated year-end 
premiums. 

Operating income for the first 
nim» months rose to $21 8m from 
5185.5m a year ago. 





Han* 



That seatritia kavc been sold otaside the United States of America and Japan. Thh announcement 
appears as a matter of record only. 


NEW ISSUE 


23ld October; 1987 


Canon 

Canon Inc. 

U.S. $200,000,000 


3% per cent Notes 1993 

with 

Warrants 

to subscribe for shares of common stock of Canon Inc. 


bane Price per cent 


Nomura International limited 

Bank of Ibkyo Capital Markets Gronp Fop International Finance limited 

Merrill lynch Capital Markets 


Banque Bruxelles Lambert &A, 
Chase Investment Bank 
Credit Commercial de Finance 
Credit Suisse First Boston limited 
Robert Fleming & Co. limited 
IBI International Limited 
KOKUSAI Europe Limited 
Morgan Stanley International 


BNP Capital Markets limited 
Citicorp Investment Bank Limited 
Credit Lyonnais 
Deutsche Bank Capital Markets Limited 
Goldman Sachs International Corp. 
Kfeinwort Benson Limited 
Mitsui Finance International Limited 
The NOcko Securities Co, (Europe) Ltd; 


Nippon Kangyo Kakumarn (Europe) limited Salomon Brothers International limited 
Rnmftftm n Finance International Swiss Bank Corporation International limited 

■■ Yamaiefai International (Europe) Limited 


n*r 


t appear* os a matter of meant only. 


New I— 


IMOetpla’.Wr 


Canon 

Canon Inc . 

US. $300,000,000 

3Vs per cent Notes 1992 


Warrants 

to subscribe for shares ofcommoa stock of Carmine. 

Issue Price WO percent 


Yamakhi International ( Europe) limited 

Fafi International Finance Limited Goldman Sachs International Corp. 

Mitsm Finance International Limited 


Algemene Bank Nederland N.V. 

Banqae Bruxelles Lambert SA. 

Banqae Pttrfoas Capital Markets Undted 

BNP Capital Markets Umited 

Citicorp Investment Bank Undted 

Cr&Ht lyomuris 

Baton Europe limited 

DKB International limited 

Kleinwmt Benson Umited 

Samuel Montagu & Co. limited 

kkngm Stanley International 

NonmmhtiernatkHud Undted 

SHmry Schroder Wagg&Ctk Umited 

Swiss Bank CorpomtUm International Umited 

Union Bank of Switzerland (Securities) Limited 


Bank of Tokyo Capital Markets Group 
Banqaetodosaez 
Btaing Brothers & Co, limited 
Chase Investment Bank 
Cr&ftt Commercial de France 
Credit Suisse First Boston Umited 
Deatsche Bank Capital Markets limited 
Robert Fleming & Co. Undted 
Merrill Lynch Capital Marktis 
Morgan Grenfell & Co. Limited 
New Japan Securities Europe linuted 
Salomon Brothers International Undted 

Sode&G&tfnde 
Tcnkeiyo Europe Undted 
Yasada Trust Europe limited 




- & 







30 


BANK JULIUS BAER 

is pleased to announce 
the opening of its Representative Office 
in Tokyo. 

Kiminori Masuda 
Jean-Claude Stadelmann 
Senior Representatives 
Yurakucho Bldg^ 6th Floor 
MO-1 Yurakucho 
Chiyoda-ku 
Tokyo 100 

Telephone: (03) 214-7063 
Telefax: (03) 214-5979 
Telex: J 22279 BJBT 

)B n B 

Zurich • London • New York 


This announcement appears as a matter of record only. 

The Kyowa Bank, Limited 

¥ 100 , 000 , 000,000 

Euro Certificate of Deposit Programme 


The undersigned are pleased to participate in 
the above programme 

Arrangers 

Kyowa Finance International Limited 
Shear-son Lehman Brothers International 


Dealers . 

Citicorp Investment Bank Limited 
Kyowa Finance International Limited 
Merrill Lynch Capital Markets 
Shearson Lehman Brothers International 


November. 1987 


Financial Times Friday November 6 1 987 

INTERNATIONAL COMPANIES & FINANCE 


GB-Inno in deal with JC Penney 


BY TIM DICKSON IN BRUSSELS 

GB-INNO-BM, Belgium's largest 
retailer, is negotiating the pos- 
sible purchase of an 'important' 
stake in the European 
operations of J.C.Penney.the 
major US retailing group. 

Both sides saidlaat night that 
the exact size of the participa- 
tion was ’still under discussion' 
but GB-Jnno eommented:*Let's 
say it will be more than 25 per 
cent*. The company added :"We 
hope to make another an- 
nouncement before the end of 
the year." 

GB Inno, which reported a 
turnover last year of BFrll5bn 
(5&2bn). plus sales of BFrlSbn 
from franchise operations, has 
roughly 8 per cent of the Bel- 
gian retail market and under 
tough local laws is effectively 
prevented Crum opening new 
stores. 


Much of its recent expansion 
has thus been outside Belgium - 
notably in the UK, France, Italy, 
Spain and the US - through fran- 
chise and share participation 
agreements in the do-it-yourself 
and fast food fields. A deal with 
Penney would be a welcome op- 
portunity to increase its pres- 
ence in the home market 

Penney's European 

operations are all concentrated 
in Belgium under the Sarma 
(supermarkets), Sarma Lux (de- 
partment stores) and Sarma 
Star (hypermarkets) names. 
There is also an important fran- 
chise operation, which account- 
ed for two- thirds of last year’s 
sales or BFr27bn. Overall, Pen- 
ney has 59 stores, against GB-ln- 
no's 200. 

"J.C.Penney has invested con- 
siderable resources in Belgium 


in the last few years and we see 
an association with GB-Inno as 
an important means of pursuing 
the development of 'our 
operations.' Mr Thomas Fox, di- 
rector of the company's Europe- 
an operations, explained last 
night 

He added that Penney’s strat- 
egy was to streamline its activi- 
ties into the more profitable 
segments and to concentrate on 
'its US home market, but he em- 
phasised that a takeover was 
not being discussed. 

"We reached breakeven last 
year, after several years of 
heavy costs, and we are now 
profitable." he explained. 

Penney, which is the third lar- 
gest retailer in the US, came to 
Belgium in the late 1960s hop- 
ing to develop in other Europe- 
an countries. 


'Over the last 10 years the pic- 
ture has not been so bright and 
like others we have had to reas- 
sess our plans,* says Mr Fox. 

•We’ve made decisions as to 
where we think we can be most 
successful in terms of profit- 
able sales.' a Penney official 
said in the US. *W© felt the Bel- 
gian operations did not belong 
in our new organisation." 

The official added the Bel- 
gian operations have hot been 
profitable for Penney. 

Last week Penney announced 
it was dropping its leas profit- 
able home electronics, sporting 
goods and photographic lines 
and expanding its women’s ap- 
parel lines. 

Penney has been moving for 
same tune to de-empbasise 
hard goods in favour of the 
more profitable apparel lines. 


Cash crisis 
for Oslo 
property group 

By Our Oslo Correspondent 

THE OSLO bourse yesterday 
suspended trading in Bugge 
Eiendom, the Norwegian prop- 
erty company which holds as- 
sets in central areas of London, 
Oslo and Copenhagen. 

The suspension follows li- 

3 uidity problems caused by a 
elay of payments by major 
shareholders subscribing to 
Bugge's NKrl55m (S24m) rights 
issue launched in September. 

Wednesday was the deadline 
for payments to be made for the 
rights issue which was, accord- 
ing to Bugge Eiendom, original- 
ly substantially oversubscribed. 
The company also said it was in 
merger talks and that this has 
contributed to uncertainty. 

Earlier this week Brugge is- 
sued a statement denying eco- 
nomic problems. But yesterday 
it notified bourse officials of 
the delay on payments for the 
rights issue and advised sus- 
pension of trading. 

Bugge’s shares, valued at 
NKrl28 apeice and which have 
seen a high of NKr275. were 
trading on Wednesday at 
NKzSL 

The company's president Mr 
Niels AB. Bugge. currently in a 
London hospital, owns some 59 
per cent of the company. A fur- 
ther 14 per cent of Bugge shares 
are distributed among other 
company members. 

The company said that it 
could now be faced with bank- 
ruptcy although it added that it 
could sell assets to raise the 
capital it needs. At the end of 
October it bad an operating loss 
ofNKzSBa. 

The Oslo bourse has accused 
the company of providing 'in- 
correct" information about its 
financial status. 

Bugge claims substantial in- 
vestments in shares and bonds 
with an estimated value or 
NKr846m. It is involved in the 
development of property in the 
Docklands area of London, the 
acquisition and rehabilitation 
of new property in Oslo, and 
property in Copenhagen. 


CREDIT LYONNAIS 

has completed the aquisition of 

ALEXANDERS LAING & CRUICKSHANK 
HOLDINGS LIMITED 

Credit Lyonnais was advised in this transaction by 

BARING BROTHERS & CO. LIMITED 



TT= 


' w ~-y - -T'-TA?' 


BARINGS 


- 1 -. vr- 




The Coastal Co r por at ion 
US$60000000 

11Y,% Senior Notes doe June 3d 1992 

Notice is hereby given that with immediate effect 
the Paying Agent in Brussels shall change from 

The Bank of Nova Scotia 
to 

Generate Bank 
Rue Montague du Parc 3 
1000 Brussels 
Belgium 

Canadian Imperial Bank of Commerce 
London Branch as Principal Paying Agent 


Canadian fanpexid 
Bank of Co n n ing 


NEVI 


A/SNEVI 

DKK 600,000.000 Floating Rate Notes due T993 

Tranche B of DKK 300,000,000 

In accordance with the provisions of the Ndes, notice is 
hereby given that, for the three months period, 6th 
November, 1987 to &h Febru ary, 1988, the Notes will bear 
interest at the rate of 10.8123 per cent, per annum. Coupon 
No. 5 will therefore be pavabie on 8th February, 1988 at 
DKK7tB8.l6percoupor. for Notes of DKK 250,000 nominaL 

AgeniBaak 

KANSALLiS-OSAKE-PANKKI 

iG.-xfar. Brant}* 


Second-quarter dive at KLM 


BY LAURA RAUN IN AMSTERDAM 


KLM. the Dutch airline, said its 
earnings tumbled by 17 per cent 
in the second quarter of the cur- 
rent year because of the weaker 
dollar, fierce competition and 
costlier fueL 

The outlook for the rest of 
1987-88 is so uncertain that the 
Netherlands’ flag carrier said 
no forecast could be made for 
fixil-year profits. The prospects 
for an even lower dollar and 
continued competition on cru- 
cial North Atlantic routes ap- 
parently are cause for caution. 

KLM, which is 39 per cent- 


owned by the Dutch Govern- 
ment, said that because of the 
stock market crash it was post- 
poning a previously planned is- 
sue of non-voting s har es to be 
launched in Switzerland- The 
uncertainty of such an offering 
apparently figured in ELM’S 
cautious comments. 

Net income amounted to FI 
143m (S74£m) in the first quar- 
ter. down from FI 173m a year 
earlier despite more traffic and 
higher occupancy rates. Cheap- 
er air fares, especially between 
Amsterdam ana the UK and the 


US. plus the weaker dollar aQ 
squeezed income, which 
slipped by 1 per cent to FI 
L49bn from FI L5bn_ 

More expensive fuel helped 
21ft overall coats by 1 per cent to 
FI 1.35bn from FI L34bo. 

For the first half of the fiscal 
year profits edged up by 4 per 
cent to FI 265m, mostly thanks 
to the sales of aircraft in the 
first three months. Total reve- 
nue slipped by 1 per cent to FI 
2.8Sbn while overall costs 
dropped by the same percent- 
age to FI 2.63bn. 


Support for Norwegian banks 


BY KAREN FOSSU ft) OSLO 
NORWAY’S central bank at- 
tempted yesterday to dispel ru- 
mours that the country's h anks 
are sulFerring a liquidity crl- 
sis.lt reiterated its commitment 
of support in a statement saying 
it is prepared to implement spe- 
cific provisions to secure the li- 
quidity of the country's banks. 

Den uorske CreditbankfDnC), 
Norway's largest bank, and the 
central bank have been flooded 
with queries from creditors 
abroad requesting Information 
regarding the solvency situation 
of the DnC and other Norwegian 
banks. 

Norway’s banks have been 
hard hit by the worldwide stock- 
market crash and are now left to 
seek a strategy which is likely to 
force them to base future earn- 
ings growth on traditional bank- 
ing activities. Banks have also 


suffered from the weakness of 
the dollar and their heavy expo- 
sure to foreign currency deal- 
ings. 

Mr Trend Heinertsen, manag- 
ing director of the Norwegian 
Bank Association, said that for 
DnC the situation is special due 
to the large share portfolio 
losses which it will incur. Earli- 
er this week DnC suspended 
one of its brokers, pending in- 
vestigation, for overtrading 
■way beyond' his limits on the 
bank’s behalC 

Mr Lars Brustad, a DnC bank 
official, said that there are 
three sets of limits governing 
trading , including an overall 
limit for investments, limits for 
each market, and limits for each 
individual company in which 
investment is made.'lt seems 
that all three trmit* have been 


substantially exceeded,* he 
said. 

DnC expects to suffer overall 
losses of more than NKrSCOm 
(383m). 

Norway’s have as much 
as 2 per cent of their assets tied 
up in stocks as well as stakes in 
many of their subsidiaries 
which also have been bard hit 
by the stock market crash. 

Mr Reinertsen said that the 
frank* began the year with a 
strong income stemming from 
strong transactions in share 
growth. This may now be wiped 
out,' he said. 

DnC denied rumours that ma- 
jor * foreign banks have 
suspended their dealing with 
it and that major losses are also 
expected from foreign currency 
dealings. 


Four 
Italian 
flotations 
postponed 

By Alan Friedman hi Milan 

SIGE. the Milan-based invest- 
ment fr pnfc which is one of Ita- 
ly’s most Important lead-man- 
agers of new share issues, has 
announced that given the vola- 
tile state of equity markets It 
will postpone four company de- 
buts on the Milan bourse. 

The on usual move by Sige, 
which is part of the I MI state 
credit Insttitute. has come as a 
shock to many brokers and 
bankers in Milan. The decision 
was announced by Mr Giorgio 
Martotti, director-general of 
Sige. It mil affect Issues that 
would have tapped the market 
for a total of L3Wbu (9238m) of 
new tends. 

Mr Marfotti explained yes- 
terday that this decision was 
taken "In the interest of the 
market and in order not to 
flood the market with too many 
issues at a delicate moment." 

The move by Sige assumes 
Importance because it 
has led most of the Important 
new share issues on the Italian 
stockmarket over the past two 
years, including the debut of 
Benetton and that of Comau, 
the Fiat factory automation 
subsidiary. 

The Sige decision is bound to 
affect the fate of several other 
company issues due to be lead- 
managed by other investment 
banks. 

It could also affect the 
much-awaited decision by the 
Montedison chemicals concern 
on a Ll.OOObn rights issue 
which is meant to help finance 
the group’s recent acquisition 
of a share in Biniont,the 

UA polypropylene company. A 
decision on the Montedison 
rights Issue could be an- 
nounced at a shareholders* 
meeting In Milan next Tues- 
day. 


XSS acquires 
German group 

By HBmy Barnes In Copenhagen 

ISS, the Danish international 
cleaning and security system 
group, has acquired Bosen- 
in seller Gabaeudereinigung, 
of West Germany. 

The acquisition will place 
ISS among the five largest 
cleaning wwipniM in Ger- 
many. 


KOP seeks FM1.26bn 
by one-for-four rights 


BY OU 1 VHTANEN M HELMM 

ONE OF Finland’s two leading 
banks, Kansallis-Osake-PankU 
(KOP), plans to raise FML26bn 
(8300m) through a one-for-four 
rights issue. 

The issue consists of 30.75m 
new shares, including 2m unres- 
tricted shares and warrants for 
Z5m unrestricted shares. The 
shares are priced at FM41 
which compares with FM58 for 
unrestricted and FM54 for re- 
stricted shares on the Helsinki 
bourse on Wednesday- 

The rights issue will raise 
BOP's total capital by FV 615m 
to FH 2.88bo, making it the big- 
gest company listed on the Hel- 
sinki stock exchange. The sub- 
scription period will start on 


NovemberSO. 

HOP'S timing might be de- 
scribed as unfortunate given 
the setback to world stock mar- 
kets. but Mr Jaakfco Lasaila, 
BOP’s chief executive, believes 
that the stock market crash is 
now In a transitional phase and 
prices will go np again. 

The proposed issue, be said, 
will hopefolly contribute to 
confidence building. He be- 
lieves Investors will absorb the 
issue because "there Is constant 
shortage of materials on the 
Helsinki bourse.' 

The proceeds will be used to 
improve capital adequacy and 
reliability. These are satisfacto- 
ry according to Mr Lasaila. 


Solvay sells 

Unitecta 

operations 

By Oar Brussels Staff 

SOLVAY. the major Belgian 
chemicals group, announced 
yesterday that it has sold the 
paint, rendering and varnish ac- 
tivities of its German subsidiary 
Unitecta Oberflaechenschutx to 
Sigma, a subsidiary of the oil 
company Petrofina. 

The price of the deal was not 
disclosed but Solvay said the 
business had an annual torn- 
over of DMIOOm ($S8£m). 

The disposal. Solvay added, 
had been made as part of the 
company’s continuing restruc- 
turing programme Uni tecta dad 
not fit into any of So Ivey’s five 
sectors. 


LIBRA BANK PLC 

iwapiagfil >*i Err tied »•■* tiaWbU/ti 

Lssioo.ooo.ooe 
Subordinated Floating 
Rate Notes due 1995 
NMice n hetefr* crirn i hal (be ImcrcM 
Ratv iw iV V>(e> fi-r I be ocnnU 
Mb Nm ember KM wtAMjy. MWfc 
per annum. On IW* Mat. I**W 
ibe CcvrortAmrani wdl br l'S£*U 97 
perl'SSiuj»»l <(< Nine and 
pet (.'SSflfl iHVDPwir, 

Baaque Paribas. London Breach 


Brasilvest S.A. 

Net asset value as of 

30th October. 1987 
per CZ Share: 59.692.64 

per Depositary Share 
17559,905.91 
per Depositary Share 
(Second Series) 
USS9.302J6 
per Depositary Share: 
(Third Series) 
US$7,916.37 
per Depositary Shane 
(Fourth Series) 
US$7395.54 




BankAmerica 

Corpo ra tion 

fkmp* m ainei»Sut»aiDti e m re 


- — ■— • — 

Floating Rate Subordinated Capital Notes Due 1997 

Holders of Notes of the above issue are hereby notified 
that for the final Interest Sub-period from 9th November. 
1987 to 7th December. 1987 the following win apply: 

1. Interest Payment Date: 7th December. 1987 


2. Rate of Interest 
tor Sub-period’ 

3. interest Amouht payable 
lor Sub-period: 

Total interest Amount 
payable: 


77*% per annum 
USS28B.81 

per USS50.000 nominal 


USS969.10 

per US$50,000 nominal 
The following interest Sub-period will be from 7th 
December. 1987 to 7th January, 1988. 

Agent Bank 

Bank of America International Limited 





1 

[jif 

I 

1 




3,000,000 Common Shares 

(Represented by Instalment Receipts) 


Tee wndmtgned have agreed to pwrebose 1,300,000 of tie above Common Shares. 

Merrill Lynch Canada Inc. Goldman Sachs C.anaA^ 

The undersigned bam agreed to pu rchase 1 JOO.OOO of the above Common Shares. 

Merrill Lynch International fit Co. 

Goldman Sachs International Cotp, James Capet fit Co. 



i 






0 


L tali ati 


«■ *■;■. 




•• *■ ..-•: -j-, ' 


•-* — .. ■ t ^pj 


America 

oration 


j* 

s u*rv* 


Financial Times Friday November 6 1987 

INTERNATIONAL COMPANIES & FINANCE 


a • i #i i I HK Land to develop key city site 

^MpDllllflCr BYDAVDDOOWBJ.MHOMQICONQ 

rarliiAAo HONGKONG LAND, among the cost or about HE5375m. shortage of ‘grade a* space in terday announced 

J. CUULvo territory’s leading property At one stage, Hongkong Land core Central and the market at profits for the year to 

groups, yesterday unveiled had discussed with Standard large over the next five years. HK$845m, a 40 per < 

*___ 1 _ __ plans to redevelop one of the Chartered the possibility of —j. M 4^^ crease on profits last 

interim loss MMssajsss BSLwassAK* i^M&strJSs *»»■■■■ 


SAB 


By Stefan Wagrtyl in Tokyo 

ISHIKAWAJIMA-HARIMA 
Heavy Indnstries (TBU), the 
Japanese shipbuilding and 
heavy engineering group 
which la in the throes of a 
large-scale cost-catting plan, 
yesterday reported a sharp re 
faction in interim losses. ■ 

The company forecast that it 
weald he v.«*Hwg profits again 
hy the end of the financial year 
next March, thanks to 

money saved in catting its 
workforce by 7,500, to 23,080. 

For th e six nun ths to Sep- 
tember, 1 H 1 made a pro tax 
loss of ¥4JS3tm (*30-»m), dawn 
from Y13.19bn, on sales which 
fen 8.7 per cent to TS4Um. 

Interest payments took YZIra 
and WwwiMBg ff Krj f n at 1 * 1,1 
Pins, a loss-making Brasilian 
shipbuilding restore, a far- 
ther YL8bn. 

Sales in- sUpbnlldlng were 
17 per cent dewn. at Y45bn; in 
the aircr aft division (which 
makes Jet engines) they fall 7 
cent; and in the general 


HONGKONG LAND, among the 
territory’s leading property 
groups, yesterday unveiled 
plans to redevelop one of the 
few remaining sites at the heart 
of the Central financial district 
- number 9 Ice House Street - 
for about HE$lbn (US$I28.2m). 

The 28 -Ooor office and shop- 
ping complex will* be linked by 
an elevated footbridge to the 
Landmark complex, making a 
total of 11 buildings in Central 
owned by Hongkong Land that 
are interconnected. 

The long-mooted develop- 
ment will be the first undertak- 
en by Hongkong Laird since It 
was swept close to financial ru- 
in by the collapse in Hong 
Kong’s property market in 1983. 

The site is adjacent to the 
headquarters of Standard Char- 
tered Bank in Hong Kong; which 
is currently being rebuilt at a 


cost of about HKg375m. 

At one stage, Hongkong Land 
had discussed with Standard 
Chartered the possibility of 
joint development of the en- 
larged site, but these talks came 
to nothing 

Architects for the new build- 
ing are Wong Tung and Part- 
ners, a Hong Kong group. The 
development will feature a six- 
storey circular dock tower. 
Apart from a basement and a 
three-level shopping podium, 
the building will haven 34-level 
office tower. 

Rebutting suggestions that 
the recent stock market crash 
would puncture demand for of- 
fice space in the territory’s 
prime business district. Hr Ni- 
gel Rich, Hongkong Land chief 
executive, said: "Notwithstand- 
ing events of the last week or bo, 
we still believe there will be a 


shortage of ‘grade a* space in 
core Central and the market at 
large over the next five yean. 

"Some tenants, such as those 
in the financial service sector, 
may cut back, and plans for ex- 
pansion may be cancelled. How- 
ever, the pure stockbrokers and 
unit trust managers only ac- 
count for about 2 Vi per cent of 
our letable space. At the same 
time, other tenants will pros- 
per, like lawyers and accoun- 
tants.* 

There is an acute shortage of 
new sites available in the core 
Central area for development 
One such location was snapped 
up recently by the Hang Seng 
Bank, which aims to expand its 
headquarters building. 

• New World Development, 
another of Hong Kong's main 
property and hotel groups, yes- 


China Light lifts earnings 


BY OUR HONG ICONS CORRESPONDENT 


clear reactors, tmnsover was al- 
so down 7 per cent 
The art km was Y4£8ba or 
7123 a- share compared with 
Yl&76bn or TASS a share. 


CHINA LIGHT and Power, the 
bigger of Hong Kong’s two elec- 
tricity generating companies, 
yesterday reported after-tax 
profits for the year to Septem- 
ber of HKf L87bn (US$214. lm), a 
13 per cent improvement on 
profits a year earlier of 
HK$L47bn. 

The company said electricity 
charges would not be increased 
in file year ahead. Charges are 
now 20 per cent lower in real 
terms than they were four years 


ago, when the first price freeze 
was announced. 

While boosting tiie group’s au- 
thorised capital from HK$8bn 
to HKHHml the board an- 
nounced a bonus Issue of one 
new share for every five already 
held, to be tended by the capi- 
talisation of HK$960m of the 
company's reserves. 

A prime beneficiary of the is- 
sue will be the family of Lord 
Kadoorie, which is estimated to 
hold about 34 per cent of the 


shares in the company. This 
summer the Kadoorie fondly 
narrowly escaped losing control 
of its other prime corporate as- 
set - Hongkong and Shanghai 
Hotels group, which owns the 
Peninsula HoteL 

China Light has benefited 
from demand which grew 12 per 
cent last year, and has substan- 
tial windfall electricity sales to 
Guangdong province in main- 
land China. 


SLOUGH 


Slough Estates pic 

f Incorporated with limited /lability in England under the 

Companies Acts 1908 to 1917. registered number 167591 ) 

£50,000,000 
10 per cent. Bonds 2007 

The issue Price of the Bonds is 97% per cent, of thrtr 
principal amount, payable as to 25 par cent, on 27th May, 
1987 and as to 72% per cent, on 27th November, 1987. 

NOTICE OF FINAL MSTALMENT 

Holders of lhe above-mentioned Bonds of Slough Estates pic (the 
"Company*') an reminded that payment of the final Instalment of 
72% per cent, of the Issue Price fells due on 27th November. 1987. 

No payment after 27th November, 1987 wIR be accepted by the 
Company unless accompanied by a further payment representing 
interest at a rate of 11 per cent per annum calculated from (and 
including) 27th November, 1987 to {but excluding) the date of actual 
payment 

The Company may at any time after 1 1th December, 1987 elect 
not to accept payment of the final instalment on and to forfeit any 
partly-paid Bonds. 

Where the Company forfeits Bonds, It shad be entitled to tetain 
the first instalment of the Issue Price previously paid and shall be dis- 
charged from any obligation to pay interest on, or to repay, such first 


US$42,000,000 

Short-term Guaranteed Notes 
issued m Series under a 
US$280,000,000 
Note Purchase' Facility 

by 

Mount Isa Mines 
(Coal Finance) Limited 

Notice b hereby given that the above Series of Notes issued under a 
production Loan and Credit Agreement dated 30th March, 1983, cany 
an interest Rate of 7%% per annum. The Issue Datr of the above Series 
of Notes b9th November, 1987, and the Maturity Date wffl be 9th May, 
1988. Tbs Euro-dear reference number for Has Safes b 47715 and lhe 
CEDEL re fe rence n um b er b 910368. 

Manufacturers Hanover limited 

Issue Agent 

6th Novem b er, 1997 


Shearson I^ehman Brothers 
Holdings Inc* 

(humfuRJied In DtddKtvtt) 

U.S. $500,000,000 

Floating Rate Notes Dae 1991 

For the three months 
6th November, 1987 to 8th February, 1988 
the Notes will carry an interest rate of 7% per 
cent, per annum and interest payable on the; 
relevant interest payment date 8th February, 1988 
U.S. $199. 


will amount to 


10 per U.S. $10,000 Note. 


By Morgan Guaranty Trust Company of Now York, London 
Agent Bank 




Novembers, 1987 


Ente Nazionale per 
I’Energia Elettrica (ENEL) 

SDR 100,000,000 

Floating Rate Debentures due 1986 
Extendible at the 

Debenture holder’s Option to 1989 
Guaranteed by tire Republic of Italy 

In accordance with the terms and conditions of tiie 
Debentures, notice is hereby given that for the 
Interest Period commencing on November 9, 1987 
the Debentures will bear interest at the rate of 
per annum. The interest payable on the relevant 

E^.Msi.^wA 1988 a9ainst 

The USS/SDR rate which win determine the US$ 
amount payable in respect of Coupon No. 14 will be 
fixed together with the Interest Rate for toe period 
commencing May 10, 1988, on May 6, 1988. 

Fiscal Agent 

3f9 ORION ROYAL BANK LIMITED 

tig A marnM* 0* TtoHoyslBsnhol Canada Group 


Brierley reassures LEL 
shareholders after crash 


BY OUR FINANCIAL STAFF 

MB RON BRIERLEY, tbe New 
Zealand entrepreneur, yester- 
day moved to ease sharehold- 
ers’ worries after confirming 
that the collapse in world equi- 
ty markets had removed about 
A9682m (US$460.8m) from the 
value of the i n vestment Portfo- 
lio at Industrial Equity (IED, 
hi« main Australian corporate 
vehicle. 

He told tbe annual meeting:. 
“Ihafs the bad news - the good 
news is that shareholders’ 
binds are relatively untouched 
in terms of profits and sales.* 

At lEL’s year-end, on June 30. 
shareholders* tends stood at 
A5U7bn. Annual net profits 
readied AS230L12UL 

IKL had no problems in servi- 
cing its debt and would return 
subscriptions for the one-for-10 
rights issue announced in Sep- 
tember. This was in view of the 
drop in XEL’s tiwir mice since , 
then to : ytHt£Kiz§TO j&Jsjfe and 
the refusal of Australian Stock 
Exchange -aathnatitti to -allow 
the company fey {educe ttvAN 1 ' 
issue price. 

iMiniwg a familiar theme 
frum Australasian takeover spe- 
cialists, Mr Brierley said the 
crash eould mean some good op- 
portunities for acquisitions. 1 
would not want to overempha- 


sise that aspect, but we are es- 
sentially a buyer.' 

• Cause Corporation, the New 
Zealand property and leisure 
group, will not make any new 
properly commitments and will 
delay the start of some develop- 
ments until financial markets 
settle, Mr Colin Reynolds, the 
chairman, told the wnnnai meet- 
ing in Auckland. 

He said the foil in the market 
value of associates, in some 
cases to less than initial acqui- 
sition prices or below asset 
backing, presented rationalisa- 
tion and acquisition opportuni- 
ties. This was where “the future 
action will be.' 

Chase's listed securities re- 
valuation reserve, which stood 
atNZ$U5m (US$70Jhn) on June 
30, would now snow a deficit of 
NZ$90mtoNZ$100m, he added. 

• New Zealand Steel, the 
steelmaker bailed out by the 
New Zealand .Government last 
year and now doe to be taken 
over by Hr Allan Hawkins’s 
E q nftifeqrp Holdings, lifted net 
profits to NZ9&Mm in the six 
months to 'September,' com- 
pared with NZ$8. 10m. 

This was in spite of a decline 
in sales to NZ$127.7m from 
NZ$17!M&n. No dividend is be- 
ing paid ahead of tbe change in 
co nt roL 


terday announced after-tax 
profits for the year to Jane of 
HK$845m, a' 40 per cent in- 
crease on profits last year of 
HKfSQSm. 

. Residential and retail devel- 
opments that were completed 
over the year have been telly 
let, the company said, while the 
three hotels operated by its 
New World Hotels subsidiary 
boasted average occupancy 
rates of between 77 and 93 per 

cent 

• Henderson Land Develop- 
ment more th«" doubled Its net 
profits to in the 

same period from HK $ 301m . 
The latest result, drawn from a 
25 per cent rise in turnover to 
HK$L7bn, included extraordi- 
nary gains of HK$35.6m where 
none were registered the previ- 
ous year. 

Mitsubishi and 
Hino advance 

By tan Rodger In Tokyo 

TWO JAPANESE motor groups 
have reported a strong profit re- 
covery in the six months to Sep- 
tember. 

Mitsubishi Motors Corporation 
(MMC), whleb recently an- 
nounced a wide-ranging mar- 
keting and product develop- 
ment agreement with 
Daimler-Benz of West Germany, 
boosted pre-tax profits 76 per 
cent to YRSbn (567.8m). 

Hino Motors, Japan’s lead i ng 
lorry manufacturer, said its 
pre-tax profits rose 32 per cent 
to Y3.9ba Both companies re- 
ported only minor increases in 
sales, indicating that the profit 
recovery came mainly from cost 
reductions and price increases. 

MMC sales rose 4.4 per cent to 
Y82Albn while Hino increased 
sales by &9 per cent 


THE SOUTH AFRICAN BREWERIES LIMITED 

(bnorporated in the Repubfir of South Ainu) 

Reg. No. 

ABRIDGED INTERIM REPORT 
for the six months ended 30 September 1 987 

SAUENT FEATURES ” 

Turnover 

Growth of 19% and beer volumes, 12% 

Earnings per share 
Improvement of 32% 

Dividend 

Interim increased by 28% to 16 cents 
Prospects 

Further growth in consumer spending is anticipated forthe remainder of the 
financial year and, therefore. Group earnings should continue to improve, 
although not necessarily at the same rate as that achieved in the first 
six months. 

INTERIM DIVIDENDS 


The Directors have declared the following interim 
dividends on account of the year ending 31 March 
1988 payable on or about 30 December 1987 to 
Shareholders registered on 20 November 1987: 

Ordinary shares 

An interim dividend of 16,0 cents per share (last 
year: 12 JB cents per share) 

Prefer en ce shares 

Interim dividends per share, calculated in respect 
of the six months ended 30 September 1987, on 
the following classes of preference shares: 

- 6,2% cumulative (R2 each) : 6.2 cents 

- 7,0% redeemable cumulative 

(R1 each) : 3,5 cents 

- 7,0% cumutetiua (R1 each) : 3.5 cents 


The (fividends are d eclar ed in the currency of the 
Republic of South Africa and payments from the 
office of the London transfer secretaries (Hill 
Samuel Registrars Ltd, 6 Greencoat Place, London 
SW1P1PU will be made in United Kingdom 
currency calculated by reference to the rate of 
exchange ruling on 14 December 1987 or at a 
rate not materially different therefrom. 

South African Non-Resident Shareholders’ Tax at 
the rate of 14,03% and United Kingdom tax will 
be deducted from the dividends where applicable. 

The relevant Transfer Books and Registers will 
be closed from 21 to 29 November 1987, both 
dates inclusive. 


2 Jan Smuts Avenue Johannesburg 2001 Republic of South Africa 

Copios id the Interim Report wa be posted to ngianewlShanMden and can bo obtained tmm the London Secretaries 
Senate Bme Limbed 99 BahapsgstB London EC2M3XE. 


NOTICE TO HOLDERS OF 




U«S.$40, 000,000 3% Convertible Bonds 2000 

Pursuant to the terms and conditions of the 
above Bonds notice is hereby given that effective from 
5th October, 1987 Daiwa Europe Limited, London one 
of the Paying and Conversion Agents, has changed its 
address to 5 King William Street, London EC4N 7AX. 


♦ 


The Sumitomo Bank, limited 

(Principal Paying and Convenaon Agent) 


Daiwa House ahead 60% 


DAIWA HOUSE Industry, one of 
Japan’s largest home builders, 
boosted pre-tax profits 60 per 
cent in the first half to Septem- 
ber to reach YULSBbn ($U2JSm) 
compared with YRfllbn, Our Fl- 
■aocial Staff writes. 

It said it was helped by In- 
creased 'domestic house con- 
struction and profits from sales 
of investment securities. ■ 


Net profits, which were 
YfiJMhn from Y4J2bn, are fore- 
cast to reach Y14bn in the full 
year compared with TKLOZbn 
the year before. 

Sales were up at Y220£bn 
against Y188-7bn and for the 12 
months are projected at 
Y470bn, up from Y386l6bn. The 
previous forecast was Y450ba i 


- ’NOTICE TO HOLDERS OF ' 

Mazda Motor Corporation 

Ill 

U&$150,000,000 7%% Bonds Dne 1993 


Pursuant to tbe tenns and conditions of the 
above Bonds notice is hereby given that effective from 
5th October, 1987 Daiwa Europe Limited, London 
one of the Paying Agents, has changed its address to 
5 King William Street, London EC4N 7AX. 




The Sumitomo Bank, Limited 

(Focal and Replacement Agent) 


NOTICE TO HOLDERS OF 

NEC Corporation 

(Formerly Nippon Bectric Co* UtL) 

U ^.$80,000,000 5%% Convertible Bonds Due 1997 

Pursuant to toe description of the above Bonds notice is 
hereby given that effective from 5th October, 1987 
Daiwa Europe Limited, London ore: of the Paying and 
Conversion Agents, has changed its address to 
5 King William Street, London EC4N 7 AX. 


NOTICE TO HOLDERS OF 

NIPPON SHEET GLASS COMPANY, LIMITED 

0) U-S.S25, 000,000 3V4% Convertible Bonds Doe 1994 
(S) U.S .$40,000,000 3% Converttole Bonds Dne 1995 

Pursuant to the terms and conditions of the 
above Bonds notice is hereby given that effective from 
5tb October, 1987 Daiwa Europe Untiled, London one 
of toe Paying and Conversion Agents, has chanred its 
address to 5 King William Street, London EC4N7AX. 


NOTICE TO HOLDERS OF 


BUMrroMa forestry ca. ltd. 

U.S.$20,000,000 3%% Convertible Bonds Dne 1999 


Pursuant to the terms and conditions of toe 
above Bonds notice is hereby given that effective from 
5th October, 1987 Daiwa Europe Limited, London one 
of the Paying and Conveision Agents, has changed its 
address to 5 Ring William Street, London EC4N 7 AX. 


♦ 


The Sumitomo Bank, limited 

(P rincip al Paying Agent. Conversion Agent and Replacement Agent) 


NOTICE TO HOLDERS OF 


SUMITOMO SPECIAL METALS CO„ LTD. 

*■ . . «. „ 

U.S.$50, 000,000 3% Convertible Bonds 2000 


Pursuant to the terms and conditions of toe 
above Bonds notice is hereby given that effective from 
5th October, 1987 Daiwa Europe Limited. London one 
of the Paying and Conversion Agents, has changed its 
address to 5 King William Street, London EC4N 7 AX. 


♦ 


The Sumitomo Bank, Limited 

(Principal Paying Agent, COnveison Agent anti Replacement Agent) 


NOTICE TO HOLDERS OF 

SUMITOMO SPECIAL METALS CO„ LIT). 

U.S.$80,000,000 2%% Guaranteed Bonds 1991 
with Warrants 

Pursuant to the terms and conditions of the 
above Bonds and Warrants notice is hereby given that 
effective from 5th October, 1987 Daiwa Europe 
Limited, London one of the Paying and Warrant 
Agents, has changed its address to 
5 King william Street. London EC4N 7 AX. 


<► 




The Sumitomo Bank, limited 

(Principal Paying and Coovmion Agent) 


The Sumitomo Bank, Limited 

(Principal Paying Agent, C on venaoo Agent and Re p l a ce m ent Agent) 

NOTICE TO HOLDERS OF 

Q.P.Corpwadai 

U.S.$70, 000,000 2%% Guaranteed Bonds 1991 
with Warrants 

Pursuant to the terms and conditions of the 
above Bonds and Warrants notice is hereby given that 
effective from 5th October, 1967 Daiwa Europe 


The Sumitomo Bank, Limited 

(Pri n cipal Paying Agent* Coaversion Agent and Replacement Agent) 

NOTICE TO HOLDERS OF 

Sumitomo Chemical Company, Limited 

U.S .$75,000,000 10% Guaranteed Bonds Due 1995 

Pursuant to the terms and conditions of the 


Elective from 5th October, 1987 Daiwa Europe 
Limited, London one of tbe Paring and Warrant 
Agents, has changed its address to 
5 King William Street, London EC4N 7AX. 


5 King 


t, London EC4N 7 AX. 


W 

U.S. $75,000,000 






The Sum itomo Bank, Limited 

(fiscal. Paying and Wanaot Agent) 

NOTICE TO HOLDERS OF 


The Sumitomo Bank, limited 

(Fiscal Agent and Replacement Agent) 

NOTICE TO HOLDERS OF 


Southe^^B^k^^COTgoration SUMITOMO CORPORATION Sumitomo Metal Industries, Ltd, 


Floating Rate Subordinated Capital Notes 
Due 1997 

Forthe six months 6th November, 1587 to 
6th May, 1988 the Notes will carry an 
interest rate of 7% per cent per annum. 
Interest due on 6th May, 1988 will amount to 
U.S. $391 HI per U-S. PI0.000 Note. 

Morgen Guaranty Trust Company of New York 

London 

Agent Bank * 


U.S.$70,000,000 2%% Convertible Bonds Dne 1999 

Pursuant to the tenns and conations of the 
above Bonds notice is hereby given that effective from 
5th October, 1987 Daiwa Europe Limited, London one 
of the Paying and Conversion Agents, has changed its 
address to 5 King WilMam Street, London EC4N 7AX. 




lire Sumitomo Bank, Limited 

(Principal Paying Agent, Ccnvcnsoa Agent and Replaceuwol Agem) 


U.S4100, 000,000 10%% Guaranteed Notes 
Due 1992 

Pursuant to the terms and conditions of toe 
above Notes notice is hereby given that effective from 
5th October, 1987 Daiwa Europe Limited, London 
ore of die Paying Agents, has changed its address to 
5 King william Street, London EC4N 7 AX. 

♦ 

The Sumitomo Bank, Limited 





32 


INTERNATIONAL CAPITAL MARKETS 


financial Times Friday November 6 1 987 


William Duilforce on rifts in Zurich’s exchange after October’s falls 

Swiss take stock of market failings 


THE SWISS stock market, to 
man; people’s surprise, has 
been among the hardest bit by 
the worldwide plunge in share 
prices. 

The Swiss Bank Corporation 
general index fell 30 per cent 
from an October 5 peak oF 734.2 
to reach a low of 512.6 on 
Wednesday this week. During 
October almost 27 per cent, or 
SFT€5bn f$46bn). was wiped off 
the capitalisation of the Zurich 
share market. 

The shock was all the ruder 
because of the relatively mod- 
est advance in share prices ear- 
lier in the year. The SBC index 
had climbed only 10.7 per cent 
between December 31 and Octo- 
ber 5. It is now wallowing some 
23 per cent below its year-end 
level. 

Bankers and analysts broadly 
agree on what happened and 
why. As they wait agonisingly 
for signals on economic policy 
from Washington and Bonn, 
their conclusions on where the 
Swiss market is heading are 
much less coherent 

Zurich was hit by two selling 
waves alter Wall Street's Black 
Monday on October 19, each of 
which lopped roughly 10 per 
cent offthe index. 

The first wave consisted ini- 
tially of foreign institutional in- 
vestors, desperate to raise cash. 

The second, more complex, 
wave was triggered by the fall in 
the dollar exchange rate - which 
always produces a knee-jerk re- 
action from Swiss investors, 
worried about the effect on 
Swiss exports. 

This time the extent of the re- 
action was compounded, bank- 
ers claim, by selling from the 
smaller portfolio management 
concerns, many of which had 
come into existence within the 
last three years. 

Those with heavily leveraged 
portfolios were forced to sell 
once the price decline ap- 
proached 20 per cent and ap- 
peared to be continuing. 

One banker said: "Nobody le- 


veraged 12 (one equity to two 
debt) could cany oa" 

Opinions differ about the ad- 
ministration of the Zurich Stock 
Exchange. Some foreign inves- 
tors, who say they were unable 
to place orders,, complained 
that the market became disor- 
derly - almost an insult to the 
big Swiss banks, which pride 
themselves on maintaining a 
stable, orderly market place. 

Sessions were shortened for 
the leading stocks, which are 
normally traded continuously. 
For other stocks, the 10 per cent 
rule, which stipulates that a 
halt must be called to trading in 
a stock where the price bas 
moved more than 10 per cent 
during the session, was aban- 
doned. 

Most controversially, the right 
to trade back” - return to a 
stock passed in the calling of 
the list - was withdrawn. The re- 
sult, one banker said derisively, 
was a 30 second rule, in which 
trades had to be struck almost 
instantaneously. 

Abandoning trading back is 
widely blamed for exaggerated 
price swings which sent some 
stocks tumbling by 30 per cent 
one day and riimhiTig by 20 per 
cent the next 

This criticism is rebuffed by- 
Mr Richard Meier, the ex- 
change's director. Some "rigidi- 
ties' have made it difficult for 
investors to puli out of the mar- 
ket as quickly as they would 
have liked. But, he adds, trans- 
actions were cleared each day 
and back offices were "kept in 
pretty good shape." 

Swiss bankers point out that 
Zurich was, for a time, one of 
the very few European ex- 
changes where foreign inves- 
tors could obtain quick execu- 
tion and take their cash the next 
day. 

Nevertheless, it was not easy 
for investors to pull out of 'sec- 
ondary* stocks other than the 
top 23 which account for 78 per 
cent of total market capitalisa- 
tion. 


Switzerland 

Swiss Bank Index 


750 



- .h K 

.^.' 4 j A:-i .. 



500 


Nov 


This has led to renewed dis- 
cussion about the narrowness of 
the Swiss market and the lack of 
liquidity outside the bunch of 
top stocks. 

Non-voting participation cer- 
tificates, issued in huge quanti- 
ties by Swiss companies over 
the last couple of years, suf- 
fered worse than the registered 
or bearer shares. 

Prices of participation certifi- 
cates, mostly held by foreigners, 
tumbled on average by more 
than 29 per cent in the two 
weeks to the end of October. 
The premiums at which many 
had been trading to shares were 
either sharply cut or wiped out 
Bearer share prices fell on 
average by 25 per cent over the 
two weeks while registered 
shares declined by less than 19 
per cent "Investors will proba- 
bly pay more attention to voting 
rights after this," a banker com- 
mented. 

Another conclusion generally 
advanced is that the Swiss new 
issue business will suffer for 
some time to come. Last year 
SFrfBbn was raised on the 
Swiss market in all types of 
bonds and shares. 

About 80 per cent of this total 


was raised for foreigners, ut 
particular for Japanese compa- 
nies, which continued, to issue a 
large volume of low-coupon, 

convertible bond issues predi- 
cated on the steady climb of 
Tokyo stock prices. 

This market for Japanese pa- 
per. bankers agree, is now dead 
so for as Swiss-based investors 
are concerned, after several 
enormously successful years, 
although market makers are 
still trading the bonds in greatly 
reduced volume. 

Reports circulating in Zurich 
that the launching of a Swiss op- 
tions and financial futures ex- 
change next March will be post- 
poned or even abandoned are 
vigorously denied by Mr Otto 
Naegeli, the project's managing 
director. 

Rumours intensified when 
the Soffex planning group re- 
cently asked the 65 banks whicb 
had applied for membership 
whether they could guarantee 
they would be ready In rim* 

The questionnaire was in- 
tended to ensure that members 
were prepared for a simulation 
phase due to start in January, 
Mr Naegeli explained. 

A cautious start had, in any 
case, been planned. The ex 
change will initially trade stock 
options oo 11 underlying bearer 
shares and participation certifi 
cates of Swiss companies, mov- 
ing later to an index contract 

Financial futures, whose al 
legedly amplifying influence on 
the recent plunge in stock 
prices is being examined by the 
US authorities, would not be in- 
troduced on Soffex until much 
later, Mr Naegeli said. 

Hie SofEex managing commit- 
tee would analyse the impact of 
fbtures trading in the stock mar- 
ket shake-out and, if necessary, 
would "take another look at the 
project,' though it was under no 
time pressure. 

Of the 65 original applicants 
for membership, 54 have de- 
clared their readiness to be in 
at the start of Soffex in March. 


Bank Vontobel cuts GDP growth forecast 


IN ONE of the earliest pub- 
lished revaluations of invest- 
ment strategy since the stock 
market crash last month. Bank 
Vontobel, the Zurich-based in- 
vestment bank, has reduced its 
forecast for the growth of Swiss 
GDP in 1988 from L8 per cent to 
0.8 per cent. William Duilforce 
writes from Zorich. 

This lower growth expecta- 
tion, and the assumption of a 
lower Swiss franc/dollar ex- 
change rate, prompts the bank 


to cut its previous estimate for 
corporate earnings. 

In what It stresses is an initial 
rough calculation. Bank Vonto- 
bel predicts no growth in earn- 
ings in 1988 compared with its 
earlier forecast of 13 per cent 
growth. 

Even so, it judges that, alter 
the fell In share prices in Octo- 
ber, the Swiss equity market is 
fundamentally cheap, with 
price/earnings ratios of 12£ for 


both bearer shares and partici- 
pation certificates and &5 for 
registered shares. 

Reductions is the rate of capi- 
tal equipment spending axe ex- 
pected to be relatively modest 
Swiss companies have already 
raised SFrfLSbu C$A89bn) this 
year via rights issues, place- 
ments and other public offer- 
ings and will not be shoot of 

Bank Vontobel foresees mon- 
ey market rates and bond yields 


moving downwards in the 
months ahead. 

It also sees a risk of the strong 
Swiss franc taking off os its 
own. This, the investment bank 
states, pots the Swiss National 
Bank into a 'monetary bind.' 

In Bank VontnbeTs view, die 
SSB has oo choice bat to aban- 
don at least temporarily its 2 
per cent long-term growth tar- 
for the adjusted monetary 


^ All these Notes having been sold this annouTicement appears as a matter of record only ■ ^ 


Volume up 
asLiffe 
launches 
option 

ByOteEurmmrteteBfior 

THE LONDON International 
Financial Futures Exchange 
yesterday launched a new op- 
tion co n tr a ct and reported that 
it had transacted record vol- 
ume U October's volatile mar- 
kets. 

Trading began as pi—— J tn 
options on Use’s futures con- 
tract based oa three-meatb 
sterling deposit Interest rates. 
Mere then SM contr a c ts were 
traded In the first hour of busi- 
ness, and by tbe end of the day 
U58 c on tr a c ts , worth > total of 
5679a, had been dealt 
The addition means that 
Uffe offers options on aD tomr 
ef Ms actively traded interest 
rate (Maxes contracts: tbe oth- 
er three axe long-term UK and 
US government bonds, and 
three-month Eurodollar rates. 

In October, Liffe’s overall 
volume rose te 1,639,212 fu- 
tures and options contracts, 31 
per cent higher than In Jane, 
the previous record month. 
The total nominal value was 
£S12.7bn. 

Mr Brian Williamson, Liffe 
chairman, said *>»»* in spite of 
the record volume, "an orderly 
market was maintained 
tiuroaghoM the aaoutk, with aO 
trades being successfully 
matched and cleared on a daily 
basis." 

Not surprisingly in a time 
when all Interest rates, as well 
as the UK stock ma r ke t, were 
volatile, aD efLKfe’s main con- 
tracts recorded su bst a ntia l in- 
creases in volume and the re- 
cent expansion In futures 
trading on the Financial 
Tlmes-Stock Exchange 199 
shares accelerated further. 

By frr the most active con- 
tract remained long gilt fu- 
tures, for which volume in- 
creased to 719488, 22 per cent 
up on September and 134 
cent above October U8K 
Long gilt option 
. me 79 per cent from 
her te 155,947. Eurodollar, 
short sterling and US Treasury 
bend futures recorded in- 
creases of 52, 59 and 42 per 
cent respectively. 

IhoSghtheFT-SE futures 
vofnme remained lew bp com- 
parison, at 72411 co nt ra cts, 
this wus 42 per cent up on Sep- 
tember and no less than 711 
per cent up on the Ortober 
1986. 

Oa October 29, Uffe set a 
dally volume record of 199,212 
c on t racts , n 58 per cent in- 
crease on the peerions peek set 
five days earlier, and well 
above levels seen b efo re in 


STRONG REACTION TO OFFICIAL INTEREST RATE CUTS 

Price rises help trigger 
activity in Eurosterling 


BY ALEXANDER MCOLL, EUROMARKETS EDITOR 


INTERNATIONAL BOND mar- 
kets reacted strongly 
to widespread cats In offii 

interest rates, with US banks’ 
prime rates coming down to 89k 
from 9 per cent and German, 
Swiss. Dutch and British rates 
all being reduced over the last 
two days. 

Rises in bond prices, as well 
as the strength of tbe currency, 
triggered a flurry of issues in 
the Eurosterling market In 
spite of the extreme weakness 
of the dollar even in the fece of 
felling European rates, the Eu- 
rodollar bond market saw a 
highly successful issue for Aus- 
tria. 

The 8250m three-year Austri- 
an issue, led by Credit Suisse 
First Boston, rammed home 
some basic tenets which i+a»ri 
managers have often tended to 
ignore in easier times, ft was 
bid late in the day at half a 
int below its issue price, a 
icount well below its ttfe per 
cent total fees and inside the % 
riling concession. 

Such a small discount to fame 
price has rarely been seen in 
recent years on a straight Euro- 
dollar issue. Cynics might argue 
that the success of the deal 
meant that it was mispriced, but 
in such fragile markets th»« 
does not seem an argument 
which will get much g o 

Although Austria is a triple-A 
rated borrower, which some 
might say should have a sound- 
er credit rating Ump the US 
Government, the issue waa 
priced - with an 8*4 per cent 
coupon and 1009b pricing - to 
yield re basis points above com- 
parable US Treasuries, net of 


recent 


It represented all that inves- 
tors have beat wanting in the 


bond markets over 
weeks -a high-quality 
name, a fairly short 
and reasonable pricing It Utt- 
erly priced tssuea^ean be^hf*- 
sorbed quite quickly. 

CSFB placed $155m of the 

deal itself Among the buyers 

are likely to be central hanks 
which must buy sovereign pa- 
per and which axe also flush 
with dollars because of their 


INTERNATIONAL 

BONDS 


heavy intervention in the for- 
eign exchange markets. 

Overall, Eurodollar bond 
prices rose by between V« and % 
point yesterday. West German 
bond prices also gained tor half 
a point, with the response to the 
Bundesbank's Lombard rate cat 
to M from 5 per cent relatively 
muted and cautious as it had 
been generally expected. The 
average yield on government 
bonds fell slightly to 6.QB from 
& 12 per cent 

In Switzerland, as the big 
banks cut their time deposit 
rates by half a point to 3 per 
cent, bond prices rose by be- 
tween aim a foil point. The 
market was already closed 
when the National Bank cat dis- 
count and Lombard rates by 
half a point to 3 and 4% per cent 

respectively. 

The strongest reaction/how- 
ever, was in tbe sterling market 
whicb opened Arm in reaction 
to the strength of sterling, the 
previous day's Interest rate 
cuts, and to the Mansion Boose 
speech of Mr Nigel Lawson, the 


Chancellor, which was taken as 
imiinuHtig a continued accom- 
modative stance following the 
stock market crash. 

Mr Lawson indicated that the 
Rnnt of England would not im~ 
mediately sterilise the impact 
of foreign exchange interven- 
tion thr ough gilt sales because 
it would not be sensible to ex- 
tract liquidity from tbe system. 

The gilts m a r k e t fluctuated 
somewhat as the day prog- 
ressed, bat was firm later as tad 
dollar foil again. 

Baring Brothers led a £150xn 
additional tranche for a £200m 
World Bank 20-ye&r issue which 
it had brought injnne. 

The 9*% per cent bonds were 
{wired at 96, which net of fees 
was the level of the outstanding 
bonds. Tbe terms gave a 60 basis 
point yield over gilts. The new 
issue was partly paid, with £30 
payable now and the remainder 
next June. It was bid at a dis- 
count equal to the fees. 

France’s Cunqpagwle Bancaire 
made a fSOtm five-year issue led 
by Kleinwort Besson, with a .10 
per cent coupon and price of 
101? 4 to give a yield of 105 basis 
points over gilts. 

Less well received was a £50m 
five-year issue for Ford Credit 
FmMing,priced by Warburg Se- 
curities at 101*4 with a 9% per 
cent, coupon to give an 85 basis 
point spread over Treasuries. 

In yen, the African Develop- 
meat Bank made a Y15bn five- 
year issue priced by Nomura at 
10114 with a 5% per cent cou- 
pon, which was quoted at the 
fees. 

In Switzerland, Chubu Elec- 
tric Power made a SFi200m 
five-year 5 per cent issue priced 
at 1004k by Union Bank of Switz- 
erland. 


French to float 30% of funding agency 

{THE FRENCH Finance Minis - 
jtry is inviting bids from private 


Locales, 

Faria. 


Renter reports from 


ale or 30 per 
cent of the capital of Credit Lo- 
cal de France, the local authori- 
ty fending agency previously 
known as the Caisse d'Aide a 
FEquipement des Collectivities 


The ministry said 30 per cent 
was being offered now and a 
further 14 per cent would be 
sold at a later date. The agency 
will be co n ve rt ed into a limited 


company remaining under state 
control. 

Tbe agency's balance sheet 
totalled more Qmn FFrl20bn 
($20.7bn) at the end of 1988. It is 
expected to lend local authori- 
ties more than FFr32bn in 1987. 


FT INTERNATIONAL BOND SERVICE 



Landesbank 

Schleswig-Holstein 

Girozentrale 


A$50,000,000 

13% per cent. Notes due 1990 


ANZ Merchant Bank Limited 
Hambros Bank Limited 

Bank Brussel Lambert N.V. 

Banque Paribas Capital Markets Limited 
BfG: Luxembourg S,A. 

Credit Lyonnais 
HELABA Luxembourg 


CIBC Capital Markets 
S.G. Warburg Securities 

Bankers Trust Internationa] Limited 
Bayerische Landesbank Internationa] S.A. 
Citicorp Investment Bank Limited 
Fay, Rich-white (L\K.) Limited 
McCaughan Dyson & Co, Limited 


Hessische Landesbank International S.A. 

Morgan Guaranty Ltd Prudential-Bache Capital Funding 

Rabobank Nederland Swiss Bank Corporation Internationa] Limited 

September 1987 



used am a* l«Bt WmW booh far wMck (tec b u adeqate mote* mnfeL 


rraSTRAIOTR 

tXSLK: 


Closiag prices on November 5 


®S 93%+2%+«* 938 
93%+«%+a% nwo 
vr-i +OH +«% w 
91% +o*z -kh, «m 
92% “&S +«V 40% 9JB 
99% -KJ%+©% 945 

' st&a s 

ws%+i%+i% to 

971, 9SV+1V+1V 934 
100 1104% IQS 0 +OV 939 
US 93% 94%+0%+0% 907 
130 95 93%40%+0% 93* 

too 98h 99 0-0% aJ6 

2D0 99k 100% +0*i -MM, 0.77 

100 9% 94% +0% +C% 948 
93k 9*V4«V4<H, 941 
91% 9J5 +0V 0 935 

96% 97*, +0% +0% 9.22 
93k 93%+OV +1 M3 
«• ?!% +<*+«. 936 

25 


Qee.lkABC(SV 

Kaa*10Ktrfc4%9 

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Financial Tunes Friday November 6 1987 


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Xxfyyl 


Ideas bring growth to finance. 

The birth of 
Ferruzzi Agricola 
Fmanziaria. 


In October 1985 Gruppo Ferruzzi sel out its 
plans to create one of die biggest agro-industrial 
groups in the world, to extend its activities into- 
new sectors and to expand into new continents. 
In less than two years Gruppo Ferruzzi has 
become the largest agro-industrial group in 
Europe and the third largest in the world. 
Furthermore it is the second private-sector 
industrial conglomerate in Italy with an 
aggregate turnover of over 18 billion dollars. 

The Group’s idea to use agricultural products 
for industrial and energy uses, and its related 
programme for environmental protection is a focal 
point of international debate. The driving force 
behind this extraordinary expansion has been 
Agricola Fmanziaria, the Group’s holding company. 
Its success on the financial market has allowed 
it to make large-scale investments such as the 
acquisition of CPC Europe, leader in the starch 
sector, the acquisition of a controlling interest in 
Montedison and Beghin-Say, and the 
restructuring of the sugar sector which makes 
the Group Europe’s leading sugar producer. 

The market capitalization of the Agricola 
fmanziaria group amounts to about 20 billion 
dollars. 


And now it is time for it to grow even more. 
Agricola fmanziaria is increasingly identified 
with Gruppo Ferruzzi and so Ferruzzi Agricola 
Fmanziaria has been bom. 

All the activities of the Group will converge in 
the new holding company so that in due course 
Ferruzzi Agricola Fmanziaria and Gruppo 
Ferruzzi will form a single entity. 

Its theatre of operations is increasingly 
worldwide. 

Ferruzzi Agricola fmanziaria will span five 
continents. 

Its widely diversified activities follow a single 
vertical structure from agriculture to services, 
from trading to agro-industry, from chemicals to 
the advanced services sector and finally to 
numerous industrial and financial shareholdings. 
Ferruzzi Agricola fmanziaria will be quoted on 
all the main European Stock Exchanges 
including London and Paris. This will lead to a 
broad national and international shareholder 
base in line with the Group’s importance. 

The cycle is in constant movement: two years 
ago ideas brought growth to finance. Today 

Finance is bringing growth to ideas. 

Ferruzzi 

Agricola fmanziaria 


1 ; 



34 


PATHFINDER STRESSES HIGH RISK OF INVESTMENT 

Eurotunnel prospectus 
forecasts big returns 


BYWCHARD'TOMKBiS 



UK COMP ANY NEWS 

Windsmoor 
rises 12.5% 
to over £lm 
despite poor 
weather 


Financial Times Friday November 6 1987 


Eurotunnel, the Anglo-French 
consortium building the Chan* 
nel Tunnel, yesterday launched 
the pathfinder prospectus for 
its flotation with figiues hold- 
ing out the hope of big returns 
for people who buy its snares. 

The pathfinder prospectus, 
which paves the way for the 
launch of the share issue in 10 
days’ time, forecasts that inves- 
tors buying units (each compris- 
ing one English share and one 
French one) at an Initial 350p 
might hope to see their value 
rise to £24 in 1995, by which 
time' the company will have be- 
gun paying dividends. 

This is because the dividend 
yields themselves will be so 
high. An initial gross yield of 16 
per cent is forecast for 1984, ris- 
ing to 34 per cent in 1996 and 60 
per cent in 2003. 

However, the prospectus 
bears a clear warning to 
would-be applicants that an in- 
vestment in Eurotunnel will 


carry a significant degree of 
risk. 

•While the directors consider 
that the assumptions on which 
the financial projections are 
based are reasonable, it must 
be realised that the reliance to 
be placed on them isa matter of 
judgment,' it says. 

As announced in Paris the 
day before, there will be two 
types of perks for private inves- 
tors who become initial inves- 
tors in the project - one likely to 
appeal more to the British in- 
vestor and the other more to the 
French. 

The biggest incentive for the 
British will be travel perks 
ranging bom one return trip for 
a car-load of passengers for the 
person baying 100 units to an 
unlimited number of trips nntil 
2042 for the person buying 1,500 
units. 

However, investors will have 
to pay £10 a year (rising with in- 
flation) for every year in which 


Global Group rises 16% 


Global Group, the USM-quoted 
meat and meat products con- 
cern, increased pre-tax profits 
by 16 per cent from £379,000 to 
£439,000 for the year to May 31 

1987. 

Turnover rose from £3442m to 
£35.7m. The directors proposed 
an unchanged final dividend of 
L75p giving a total of 3p C2.75pX 
After tax of £185400 (£182,000) 
and minorities of £13,000 (nil), 


earnings per lOp share rose to 
6p(4-9pX 

The directors said that trad- 
ing in the group’s wholesale ac- 
tivities was exceeding all levels 
of the previous year and mar- 
gins were very satisfactory. 

At the end of September the 
group acquired SOlOI per cent of 
Ken Bead and it was antici- 
pated that it would be taking up 
the balance before the end of 
1987. 


they use the perk, plus a £1 fee 
for each single trip. The perk is 
also only for car-drivers using 
the shuttle service, so foot pas- 
sengers using ordinary trains 
will not receive any benefit. 

The other incentive is the 
warrants which will be attached 
to each unit Hen of these will 
entitle the holder to subscribe 
to one unit at a fixed price be- 
tween 1990 and 1992. These are 
a common feature of French 
privatisation isoes. 

About 220m units are expec- 
ted to be sold at 350p each, 
though neither figure has yet 
been finally Aged. This will 
raise £770m in new equity, 
which when added to the equity 
issued in the earlier private 
placing! will produce an initial 
market capitalisation of about 
£Llbn. 

Institutional investors who 
took part in last year’s piariwg 
paid in effect £L20 plus FFr12, 
or about 240p, for each unit, so 
the 350p Issue price reggemed 
yesterday gives them a premi- 
um slightly hi gh at than thl» 42 
per cent forecast 

Hr Alastair Hor ton, the con- 
sortium's UK co-chairman, said 
that nearly 500400 inquiries 
had been received by the Euro- 
tunnel share information office 
and bad continued at a steady 
rate in spite of the stock market 
crash. 

Mr Bob Boas of Warburg Se- 
curities, one of the UK advisers 
to the issue, said that be was 
confident that the issue would 
be folly underwritten 


toy Alice Rawsthom 

WINDSMOOR, the women's 
wear fashion house, yesterday 
announced a 12J5 per cent In- 
crease in pre-tax profits to 
£L03m for the first half of file 
financial year on turnover 
which rose by 154 per cod to 
mon. 

like many other fashion 
groups Windsmoor was affect- 
ed by the sluggish pace qf 
clothing sales during the 
spring and summer, when re- 
tail trade was hit by the dismal 
weather. 

Mr Brian Green, chairman, 
described the pace of sales In 
August and September ms 
"steady*, but said that business 
had perked up in recent weeks. 
f-xt month the company expe- 
rienced sales growth of 23 per 


In the six months to August 
1, operating profits rose to 
fUn (ai.iiw) yd foe contri- 
bution from Windsmoor*! over- 
seas associate increased to 
£58, M0 (£38,000). Interest 
charges rose to £365,696 
(£231,000) and taxation to 
£375400 (£339,000). 

Earnings per share la- 
creased to 248p (2-02p). the 
board proposes to pay an inter- 
im dividend oflJSSp. 

Mr Green said, that profits 
growth had been hindered by 
the increase in interest pay- 
ments due to the high levels of 
stock carried by the company. 
The management team is now 

tn*Hing flilt 

Windsmoor manufactures 
and retails two brands of wom- 
en's wear - the synonymous 
Windsmoor label and Planet - 
in almost 669 concessions 
within department stores 
throughout the UK. It has Just 
embarked upon a Joint ven- 
ture, Golden Rifle, with an 
Italian mannfhetnrer of casu- 
al wear, 

; This spring the company 

will open Us first High Street 
shops, in St Albans and Chel- 
tenham, in order to test the 
concept of running indepen- 
dent retail units. Neat autumn 
it will Introduce a new wom- 
en’s wear label for "petite* 


Phillips and Drew, stockbro- 
kers to Windsmoor, expect the 
to produce pre-tax 




with earnings 
the foil 


I year. 


This anno un ce ment a p peals asa matter of icoopioniy 


November 1987 



electrocomponents pic 


has acquired 

the >WSCO operations in Europe 
and 

AHSCOlne. 

The Gillette Company 


Uljil 


County NatWest 

initiated this 

transaction and acted as advisers to 
Eleetrocomponents pic 


County NatWest International Limited 
100 Wall Street 
New “fork 
NY 10005 
TfeL* (212)4408300 


County NafRfest limited 
Drapers Gardens 
12 Throgmorton Avenue 
London EG2P 2ES 
Tel: 01-382 1000 


AneNeffitofamtootBodiGraw 


Alice Rawsthorn on a famous name’s diversifications 

Learning the retailing game 


FOR COMPANY chairmen, tak- 
ing their business to the stock 
market is supposed to be one of 
the best experiences of their 
lives. For Mr Brian Greco, 
chairman of Windsmoor. tt was 
one of the worst 

Only a few days after the flota- 
tion a year ago it emerged that 
two employees of Chase Man- 
hattan, then broken to the com- 
pany, had 'stagged* the issue. At 
no time was it suggested that 
Windsmoor had been associ- 
ated with the exercise and it 
swiftly dropped Chase Manhat- 
tan as its brokers. 

Nevertheless the advene 
publicity around the issue de- 
pressed the share price for sev- 
eral months and cast a ctottd 
over the flotation. For Mr Green 
lit was "the most painful experi- 
ence of my lift*. 

The flotation Is now no more 
th an a painful memory and 
Windsmoor is ensconced In its 
plans for the fixture. The compa- 
ny is already established as one 
of the best known women’s wear 
manufoctorers In Britain. Over 
the next year it plans to diversi- 
fy into new market niches and 
into the High Street, as a retail- 
er. 

Windsmoor dates back to the 
early 1930s when three brothers 
• Cecil, Lionel and Maurice 
Green, the sons of a London tai- 
lor and ancles of the present 
chairman - established a busi- 
ness to manufacture ladies 
coats. During the war Winds- 
moor retrenched into utility 
wear. After the war it embarked 
upon an extravagant advertis- 
ing campaign, *wniaMn^ the 
legend "Look Your Best in 


1 


r 


/ 


Windsmoor" over fixe bomb sBes 
of Britain. 

Windsmoor flourished in the 
1950s, When it diversified into 
dresses, suits and separates. Ip 
the early 1960s it opened its 
first concession within a de- 
partment store. 

But in the 1960s and 1970s 
Windsmoor feu victim to its own 
success. The company's name 
was associated so strongly with 
the 1950s - too strongly for the 
taste of the liberated young 
women of the Swinging Sixties - 
that its clothing was seen as 
dull and outdated. 

Nevertheless the business 
continued to grow. It started to 
source part of its clothing over- 
seas; through a joint venture in 
Hong Kong and from contract 
manufacturers in Czechoslovak- 


iamidRaJy.lt also opened new 
eonrosfoos and, in the late 
1570s, bdredneed Planet, a new 
coaeetioa for career women. 

Throe mtt ago Windsmoor 
decided, to enliven its flagship 
brftDd. SfBee then it has at* 
a delicate bal- 
ance be twe e n attracting new, 
f onnsB r cwtomers with more 
stylish designs without losing 
Its elder, traditional clientele. 

So far Windsmoor has suc- 
ceeded. It has done so through 
unashamed "cheating" - by mak- 
inf softs with both chic, short 
dmbandltogrlagttisfertto 
mean mature customer - and 
with a witty advertising cam- 
paign depleting Windsmoor 
eZotbet as blatant copies' of 
those of designers like Chanel. 

Windsmoor now sells throogi 
a on than 300 department store ' 
concessions and Planet t h rou g h, 
almost 28a Although there is 
scope for a little farther growth, 
the two labels have shaft 
reached the limits of their mar- 
kets in department stores. 

Next autumn Windsmoor 
plans to introduce a new nu» 
of fashionable clothes for. small 
women under B3*. The new la- 
bel - as yet unnamed - will be 
introduced Initially to 35 con- 
cessions and should be extend- 
ed thereafter. 

The cast of establishing a new 
range is relatively low. The 
company has recruited a new 
designer, pattern cutter, fabric 
selector and manager for the 
project, but production and dis- 
tribution vQl be handled 
through its existing operation. 

It is also divnrsifaag into re- 
tailing. It recently opened the 


first outlets for Golden Rifle, a 
joint venture with an Italian ca- 
sual wear manufacturer. 

Early next year the first 
Windsmoor shops will open. 
The company is convinced that 
these is an opportunity in the 
High Street for a retailer to fill 
the gap between the multiple# 
like Next and Richards and the 
designer shops. Yet ft perceives 
its retail venture as an experi- 
ment. 

In the past few months WJnds- 
moor has strengthened its man- 
agement team in order to pre- 
pare for this expansion. Until 
recently Mr Brian Green, origi- 
nally an accountant, acted as 
both finance director and chato- 
man. Mr John Whittle has now 
been drafted in as finance di- 
rector. The company has also 
appointed a production direc- 
tor. Mr Ian Atlas. 

Mr Green ia now keen to in- 
creese the company’s efficien- 
cy. Improving stock control is a 
priority. Traditionally Winds- 
moor has carried high levels of 
stoak. but In the first half or this 
year stocks rose to unhealthily 

ir has already begun 

to tackle the levels of fabric 
stock for manufacturing. Over 
the next few months it will in- 
vest in Improved distribution 
sys tem * ana data capture with- 
in the concessions. The benefits 
of this exercise should filter 
through to profits next year. 

As Mr Green put it: “It is often 
•say to forget that originally we 
were manufacturers and that 
manufacturing is our area of ex- 
As retailers we still 
a lot to learn.' 


Westbury advances to £5.3m 


BYNHOaTAIT 

Westtary^he Midlands and 
West Country housebuilder, 
yesterday reported an 87 


Elders, owner of the Courage 
[group in the UK, has increased 
Jits stake to 995 per cent. Greene 




cent increase in pre-tax profits 
to £545m during the mg months 
to end-Angust, on turnover 66 
per cent higher at 2534m. 

The figures, however, are dis- 
torted by the acquisition of the 
Midlands housebuilding divi- 
sion In October 1906. which 
Westbury bought from Christian 
Salveson for £124m cash. 

The Midlands co n t rib ut i on la 
excluded from the first half fig- 
ure in 1966, and yesterday foe 
»«w"P»uy declined to give any 
break-down of its first-naif con- 
tribution this year. Analysts 
were yesterday estimating that 
file underlying rate of organic 
.profits was around 50 per cent 
during the first half 
At the earnings per share jew- 
el, the published figures show a 


264 per cent improvement to 
9.64p; had results for Midland 
been included in the compara- 
tive 1986 figures, the increase 
would rise to 34 per cent 
Yesterday, chief executive 
Richard Fraser - part of the 
team which organised the man- 
agement buyout of Westbury 
three years ago - said that the 
company was monitoring its 
business extremely careftiDy in 
the light of the current turmoil 
on Wn«nri»i markets, but so far 
aaw no signs oT any impact on its 
segment of the housing market 
During the first halt Westbn- 
xy average selling price rose by 
around 31 per cent to £48400 - 
an undariyuog increase of 15 per 
cent ogcegllowance is made for 

shift in the business mix follow- 
ing the Midland purchase. . . 

Just over 1400 nnits we r e 
completed and the figure for 


Greene King hits at Elders stake 

BY CLAY HAROS 

Wng shares , wh ich have output^ 
formed the Ff AH Share index 
by 40 per cent since the stock 
ma r k e t crash because of Elders* 
buying interest, yesterday shed 
lpto450p. 

In a letter sent to sharehold- 
ers, Mr John Bridge, chairman, 
said Greene King continued to 
believe that selling Elders’ la- 
gers would not be in its com- 
mercial interest Elders de- 
clined to comment 


Ring, Suffolk b rewer , 
yesterday denounced as “unde- 
sirable and unacceptable' the 
shareholding in the company by 
Elders m. and any attempts by 
the Australian brewing, pasto- 
ral and financial services group 
to use it to gain trading advan- 


the fan year is expected to bet- 
ter lSOT* 340a. 

The tax charge in the first half 
is SL84m - 38 per rent is the ex- 
pected rate for the year - and 
the Interim dividend goes up 
4taml5ptoi»73ix 

•comment 

. Under current circumstances, 
the downside to Westbury is 
that it is a pure housebuilder - 
untainted even by renovation 
work, let alone aggregates, time 
share and so on. The mitigatin g 
factors are that 50 per cent of 
output is fertile first-time buyer 
market, and the South-east ac- 
counts for a minimal put Of its 
workload or land bank. More- 
over, tiie average selling price 
remains relatively modest and 
e x c ur sions u pmar ket - like the 
8-house development at Pen- 
axtbu goingibr £200400.a piece - 
are extremely rare. That fifes 
may not make current margin* 
the most existing in the sector 
•and if recession really bites, the 
company is clearly vulnerable. 

down antfperfuips tW!tnw figfn 
pre-tax virtually secured for the 
full year • admittedly helped to 
the tune of £lm by a properly 
profit in Cheltenham - the pro- 
spective p/e has fallen to under 
a That may be a slight premium 
to some of the *hatiottar groups, 
but it still looks a mite unfair 
given Westbury’* defensive 
merits within the sector. 


Hong Kong 
stake in 
Cluff OM 

By Lucy Kearney 

Mr 14 Ka-Shlng, the Hang 
Kang basbtessmjin, announced 
yesterday that he had built up 
a 144 per cent stake in Cluff 
OH, the oil and gold explora- 
tion company controlled by Mr 

Al gyfawff, 

Mr Li, who already owned 
nearly 5 per cent af the compa- 
ny. Increased his holdings over 
the past week through bis pri- 
vately aw u e d concern, Marina 
Equities. Mr U apparently has 
no predatory Intentions to- 
wards CfafL and views his in- 
creased stake as a long-term 
investment. 

Cleff said .yester d ay that it 
was Mattered*, that Mr Lj had 
Increased his holding in the 
com p any, which it said marked 
a vote of confidence in its busi- 


Mr li has been involved with 
Cluff sinoe 1979 when it back- 
ed an unsuccessful Cluff oil 
exploration venture in China. 

The stake could open the way 
to joint ventu r es between Cluff 
and some of Mr Li's other com- 
panies. Through Hutchinson 
Whampoa, the Hong Kong 
trading group, Mr LI owns a 
controlling interest in Husky 
Oil, the Canadian energy 
group. 


US buy for Eleetrocomponents 
as profits rise 13% to £20.5m 


' BYPHUPCOGGAN 

E l ectr ocma poueats, the elec- 
trical distribution group, an- 
nounced an acquisition in the 
US together with interim pre- 
tax profits up 23 per cent yester- 
day. 

Gillette is selling Misco, a 
computer supplies distributor, 
to Eleetrocomponents for 
around £llm. Misco has half its 
sales in the US irith the rest in 
the UK, West Germany and Italy 
• however the European 


_ £L4m In the first nine months 
of 1987. 

US acquisitions, after being 
fashionable for the first nine 
months of the year, have be- 
come less popular in the wake 
of the stock market crash and 
doubts about tiie health of the 
American economy. 

from pointing to recortPorciers 
in Its existing US businesses, is 
confident that its strategy Is cor- 
rect Computer supplies is a 
growing area, it believes, and 
Misco is not just US-based, la 
addition, the fall in the dollar 
means that Eleetrocomponents 
was able to buy Misco more 
cheaply than it could have a few 
months ago. 


KkoY UK and West German 
operations are now approach- 
ing breakeven and the Italian 
bus iness should be out of losses 
feytheendofma - 

Electrocomponents’ pre-tax 
profits for the six months to 
September 30 were £205n> 
(£18. Im) on sales 18 per cent 
higher at £W9m (£U£6m3. 
Overall, margins were down 
slightly because of the addition 
of WM Ligh t i n g which- is tradi- 
tionally stronger in the second 

half 

RS Components, the UK dis- 
tributor which constitutes some 
80 per cent of turnover, in- 
creased sales and profits at 
around the same rates as last 
year. However, the company re- 
ported that the West German 
market remained weak. 

After tax of £7.4m tfS.4m), 
earnings per share were &42p 
(5.74pXT& interim dividend is 
bein g inc re ased to L27p(Llp£ 

•comment 

Investors need little excuse to 
sell at the moment, ami Electro- 
components bold US purchase 
was enough reason to push the 
shares downSp to 157p, despite 


the overall market recovery. 
Strategically, the Misco pur- 
chase makes sense; but any- 
thing with a US slant, even if it 
is only 50 per cent of sales, is 
likely to be unpopular in cur- 
rent conditions. Distribution is 
a volume sensitive business and 
any economic downturn would 
undoubtedly hit Electroeompo- 
eeats; but the company has a 
reputation for good manage- 
ment and the early 80s slump 
saw merely a slowdo w n in the 
company's growth rate rather 
than a decline. Nevertheless, 
analysts were cautiously shad- 
ing their forecasts down yester- 
day; assuming £4©m pre-tax for 
tim fall year, the shares are on a 
f just under 1L 


[Amber 3 

Bri* Bn 


DIVIDENDS ANNOUNCED 


Industrial -Int 
Borneo Fet —int 
[Daks Simpson fin 

iBcctrocomponent.int 

[Five Oaks Inv. fin 

fGieves Group 
(Global GroupS -—-fin 

(Goldberg (A) int 

Grampian TV tot 

[Hanover Druce - — int 

John J. Lees int 

Miller (Stan) -int 

Westbury int 

Windsmoor int 
Yorklyde Int 

Dividends shown pence per share net except where otherwise 
stated. "'Equivalent after allowing for scrip issue. +On capital in- 
creased by rights and/or acquisition issues.' 5USM stock. (Un- 
quoted Mock. 0Thml market 


Current 

Date 

of 

Corres- 

ponding 

Total 

for 

Total 

last 

payment payment 

div 

year 

year 

3.25 

Jan 5 

3 

_ 

10 

74 


7 

. - • 

205 

645 

Jan 4 

5JS5 

8.6 

7 

L27 

Jan 1 

LI* 

• - . 

3.7* 

1 


nil 

1 

nil 

L5 

_ 

L2 

- 

3.7 

L75 

Dec 23 

L75 

3 

2.75 

L32 

Feb 19 

L15 

- 

4.75 

0.43 

Jan 8 

043 

- 

23 

L35t 

Dec 18 

L2 

- 

345 

0.63 

Dec 11 

0l5* 


L5* 

0.5 

Dec 4 

05 

•• 

L25 

1-75 

Jan 20 

L5 

- 

4.7 

L25 

Dec 11 

- 

. - 

2 

2.75 


2.75 

- 

7.55 


Midsummer 
sells stake 
inBoddington 

By Lire Wood 

Midsummer Leisure, the gro* 
ing discotheque, public boui 
and snooker club busines 
which last month made an ui 
successful takeover approach l 
Haddington, has sold its 2.1 p< 
cent stake in the Manchesle 
based brewer. 

Midsummer said yesterd; 
that the sale had realised aboi 
£2.88m. The cost of the share 
built up during the summe 
was about £24zn. Mlds umnM 
said the proceeds would l 
used to of&et its bank indebted 
ness. 

Midsummer, in its inform 
approach, had proposed to offe 
7 of its shares for every 15 B04 
dington. No cash alternate 
was offered. Bod dington, whic 
owns some 560 public house 
rebuffed the approach 


YORKSHIRE 
BANK 
Base Rate 

Yorkshire Bank aimourtces that 
with effect from dose ofbusaness on 
WEDNESDAY NOVEMBER 4 1987 
Base Rate is reduced from 

9fa% to 9% 

All facilities (htduding regulated consumer credit 
•ewanents) wfcfcantecf interest linked to 
^fari ts h i rc Barit Base Rate wiB be 
varied acoorftn^ji 

^forfd^eBank 

Head Office 

20 MemoaV^ Leeds LS28NZ 


_ A ... 





4f 






hiuiwntl Iinicv| ; rulu\ November 6 I . 


UK COMPANY NEWS 


ln *e Storehouse attack on 


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v 2*. 

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it 






V ■* ^ *- S ' 


Hong Koi^ 
!>take in 

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\ ! iJsuniBff 

v;. ;N Stiili* 

]l 2 



BY NIKKI T AIT 

Storehouse, the giant retail 
group which takes in BhS, Habi- 
tat and Richards shops,, yester- 
day launched a hard-hitting at- 
tack on the •demerge* - bid from 
me relatively tiny investment 
dealing and civil engineering 
company, Benlox Holdings, des- 
cribing it as 111 .thought-out” 
and •carrying untold risks for 
Storehouse shareholders’. 

The Benlox offer document, 
claims Storehouse's defence 
document, ’is riddled with inac- 
curacies and is remarkable for 
its misunderstanding of Store- 
house group. 1 * 

Benlox is proposing that the 
Storehouse empire should be 
broken up into six separate op- 
erating groups - covering the 
different retail whain^ the .de- 
sign function and the property 
interests - which would then be 
separately listed. But Store- 
house argues that the Conran 
Design Group is. "at the very 
heart* of the group, crucial to its 


success, and that “Storehouse 
supplies a fall range of services 
which would-be highly expen- 
sive to reproduce within 'each 
company.' 

Moreover, the' defence docu- 
ment lams into the record of 
both Benlox and certain Benlox 
directors. “Beul OX’S financial 
performance in recent years 
has been appalling”, claims 
Storehouse, pointing out that 
dividends have been paid out of 
reserves for the last two years 
despite a deficit on revenue re- 
serves at end 1985 and end 1986. 
And it. describes the record of 
Airship Industries during the 
early eighties when Benlox 
chairman Mr Andrew Millar 
was managing director/chair- 
man as “one of the sorrier epi- 
sodes in UK corporate history.* 

Last night, however, Mr Peter 
Earl - a Benlox director and the . 
guiding light behind its adviser, 
demerger specialist ffincorp 
Earl - criticised the personal at- 


tack. “Reading the document, 
you would assume Andrew Mil- 
lar is a leper -that it cleariy not 
the case. 

"But that’s not what this is 
about - this is not a personal 
vendetta' between Andrew Mil- 
lar and Sir Terence Conran.” 
The demerger idea, he argued, 
was both practical and support- 
ed by analysts; the Design 
Group could, and bad operated 
successfully for non-Storehouse 
clients; and he claimed that 
stressing the degree of Inter- 
company service offered by 
Storehouse was at odds with the 
disclosure of a "small head of- 
fice of 40 people.” Be also point- 
ed out that Mr Miller did not 
take over at Benlox until Janu- 
ary. 

Yesterday, Mr Earl's private 
company, Sloane Corporation, 
disclosed that it has purchased 
another SjOOO Benlox shares, 
taking its stake to 15J100 or 
0.0375 per cent 


Ladbroke holders shun rights 


BYNDOOTAir • 

COLLAPSING share prices 
have resulted in just 2.4 per 
cent of the £254m rights issue by 
hotels, betting, and property 
group, Ladbroke Group, being 
taken up by existing sharehold- 
ers. 

The outcome, announced yes- 
terday, represents the largest 
rights issue flop since the stock- 
market maelstrom blew up. The 
low repsonse, however, looked' 
inevitable on Wednesday after- 
noon, when the issue closed 
with Ladbroke shares standing 
at 314p against the 378p rights 
price. 

Yesterday, Ladbroke said it 
felt it was unfortunate that mar- 
kets had turned during the 
course of the issue but stressed 

ABF bid for 
Berisford 
i$ cleared 

ByCtayHantr 

- I . • 

The £787m bid for SAW Beris- 
ftrdfay Associated British floods 
was cleared yesterday to pro- 
ceed without a reference to the 
Monopolies and Mergers Com- 
mission. It remained unclear 
last night, however, whether 
that is ABF's intention. 

The millinguid baking group 
Is due to announce today the 
level of acceptances ofitsAOOp 
cash offer-received by, -yester- 
day’s first* fe£6sih& 'date. vBfetfe 
ford shares, fell another Bp to 
265p yesterday, . -but finished 
above the day’s worst levels. 1 
The. Government’s decision 
not to refer the ABF hid came 
nine -months after it accepted 
the Monopolies Commission’s 
advice to block rival offers for 
Berisford, owner of British Sug- 
ar as well as commodity, prop- 
erly and financial services in- 
terests, from Tate A Lyle and 
Fe mre ii 

Both suitors subsequently 
sold their stakes - Ferruzzi to 
ABF and Tate-to Berisford di- 
rectors and the Chicago-based 
Pritzker family. 

Earlier yesterday, Berisford 
directors and the Pritzkers 1 
family’s Hannon Corporation 
had announced that they did 
not intend to accept the ABF of- 
fer before the 3pm deadline. 
The board last week had de- 
clined to give form advice of ac- 
ceptance or rejection. 

Berisford - reminded ' share- 
holders that acceptances were 
Irrevocable until November 26, 
two days after the delayed ex- 
traordinary general meeting at 
which ABF shareholders are 
due to decide whether to ap- 
prove the takeover. 

The controlling shareholder, 
George Weston Holdings, has al- 
ready indicated its doubts 
about proceeding. 


that the deal which occasioned 
the cash call - the £2 bn pur- 
chase of the Hilton hotel chain 
from US group Allegis - was liv- 
ing up to all its expectations. 

•We have been owners of the 
Hilton chain for some weeks.” 
said the company, 'and the 
more we look at it the better the 
deal is.* 

The rights issue was Lad- 
broke's second call this year - 
the first Coming in April, when 
it raised £294m. Until fears 
about the overhang of rights 
shares hit the market this week, 
the Ladbroke share price had 
been felling roughly in line with 
the market itself! Yesterday, 
however, they slipped another 
17p to 297p. 


Goldberg advances 56% 
to £724,000 at midway 


BY CLAY HARMS' 

A. Goldberg & Sens, Scottish- 
based retailer, yesterday re- 
ported pre-tax profits of 
£724,000 in the 26 weeks to Sep- 
tember 26. The 56 per cent ad- 
vance from £465,000 last year 
was achieved on sales .18 per 
cent ahead at 222.7m (glftBin). 

Mr Mark Goldberg, chairman, 
said itwasioo early to judge the 
prospects for sales over the 
Christinas period, especially 
be&urife of economic uncertain- 
ty; following /the stock market 
crash. 1 *- " i ’. __ 

achieved the best increase in' 
turnover, lifting sales by 37- per 
cent to £9Bm (28.8m}. Within the 
total, WryggesMan increased 
sales by 140 per cent fo £1.6m.' 

Turnover at the original Gold- 
berg stores fell by 3L2 per cent 
to £12m (£12. toO, but women's 
fashion sales - now identified as 
the core businesses -- were 
ahead by 11 percent Non-cloth- 
ing merchandise has been re- 
moved from all stores except 
the two largest. In Glasgow, and 
Edinburgh. 

Schuh, which Goldberg 
bought as a four-shop shoe re- 
tailer . In April, contributed 
sales of £L45m. By the end of 
the. financial year, Schuh is ex- 
pected to have seven stand- 
alone shops and 28 units . in 
Wrygges or Goldberg stores. 

From its initial beachhead. in 
north-west England, Wrygges is 
preparing to open a store in Bir- 
mingham’s new Pavilion Centre 
with others .planned . in the 


north-east. West Midlands and 
south-east. 

Goldberg expects to receive 
£&5m to £6m from Royal Bank of 
Scotland’s exercise of its option . 
to buy the remaining 40 per cent 
of the Style credit card opera- 
tion, which contributed £527,000 
to first-half profits. ■ 

Baminp per share rose to 
2Jp (l-8p), and the interim divi- 
dend is raised to L22p(L15pX ■■ 

•comment 

Goldberg^ shares have suf- 
fered from the reverse 'Midas 
touch of the Antipodean inves- 
tor, underperforming the FTA 
Stares index by 6 per cent since 
the stock market crash. There is 
no -justification for this, and 
Charterball has taken the op- 
portunity to raise its stake to 
10 l 3 per cent Goldberg's natu- 
- ral caution has been vindicated 
and reinforced by the new wind 
of uncertainly. Southward ex- 
pansion is on course to continue 
at a prudent pace, an apt de- 
scription, as well for the two- 
stage withdrawal and redeploy- 
ment of proceeds from the cred- 
it operation. Pre-tax profits of 
£3u3m for the ftall year would put 
the shares on a prospective p/e 
of 1L7. Although the fundamen- 
tal strategy cannot be faulted, it 
remains open to question 
'whether the group can wrest 
enough, sales from the- fickle 
fashion gap it and others per- 
ceive below Next and above the 
less convincing flatterers of the 
George Davies formula. 


MFI goes ahead with 
management buy-out 


Moss Advertising 

Mass Advertising yesterday 
ann ounced two small- acquisi- 
tions, the considerations being 
met by share issues. 

It is buying Famfield Market- 
ing consultants for an initial 
25^00 shares, with further pay- 
ments dependent on profits. It 
is also purchasing Rugge Price 
Associates, a New York based 
public relations and special 

promotions company, for 
$160,000 in shares. Moss shares 

closed at 81p, down Sp. 


MFI,the fhrnlture retailing 
group, said yesterday that it is 
going ahead with the £715m 
managemen t buyout from As- 
da-MFI in spite of the stock 
market collapse. 

Its statement followed ru- 
mours that the deal could be in 
jeopardy because of fending 


EC 


Mr Derek Hunt, c hair m an, 
said that the £515m of debt and 
£190m of equity to. finance- the 
deal had now been fully sold 
down. 

The collapse of share prices 
had made the financing more 
difficult but the de al had in any 
case been underwritten 'by 
Chemical Bank and Charter- 
house. 

Since Black Monday, analysts 
have viewed the management 
buyout as an excellent deal for 
Asda-MFI because of the cash it 


HNANClALlttffiS 

CONFERENCES 


will receive as .a result. It 
shares have consequently out- 
performed the market consider-, 
ably. 

Mr Hunt said yesterday that 
he had ' no regrets. Although 
MFI might have been able to ne- 
gotiate a cheaper price after the 
crash it would probably not 
have been able to raise the nec- 
essary debt 

The deal has alreatfy been ap- 
proved by shareholders of As- 
da-MFI and the Office of Fair 
Trading has given it clearance. 
Completion js planned for No- 
vember 16. 

! HFL which bought its main 
supplier Hygena for about 
£200m as part of the buyout, 
wants to return to the stock mar- 
ket within three years. Mr Hunt ! 
said there was no need for that 
target to be revised. 


World 

Tfefecornimmications 

1 and 2 December 1987 

London 


ForMormalionpleMSBmtamM 

advertisement, togUher nth your 
business cud, K 
Ffttanctaf Times 
Co nference Or gan MeBo n 
2 nd Floor 
126 Jenuyn Street 
London SW1Y4UJ 


telephone m-925 2323 
Sex 27347 FTCONFQ 
FaxrOI -925 2125 


SWITZERLAND 
BANKING, FINANCE & INVESTMENT 

The F i na n cial Times proposes to publish this 
survey on 

TUESDAY 15tfa- DECEMBER 1987 

For jurtber iof o im adoa please coaian- 
Ganter Breitling on 022/311- 604 
Financial Times (Switzerland) 

15 nte' dii Cendrkr, 1201 Geneva 
or Patricia Surridge 
Bracken Home, 10 Cannon Street 
tendon EC4P 4BY - Tds-Dl-248 8000 extn 3426 

FINANCIAL TIMES 

... afiQPFSBUaNEBSNEWSPAPSI 


Gieves profits 
58% ahead to 
£0. 7m halfway 

A 58 per cent improvement in 
pre-tax profits, from £444000 to 
£703,000, was reported by Gieves 
Group, for the half year to end- 
July. 

The interim dividend is 
stepped up to U5p (L2p). with 
earuings per 20p share ahead 
from3.4pto45p. 

Mr Michael Keeling , the 
chairman, said there was clear- 
ly a chance of Gieves & Hawhes 
International, breaking even 
over the year. Chivers was 
launching new products which, 
it was hoped, would restore 
profit margins. 

Total turnover advanced by 13! 
per cent to £2L4lm (£UhnX Tax 
was £2554300 (£125,000). 


Daks tops expectations 


BYHHKESMmt 

IMPROVED .manufecturing fa- 
cilities helped Daks Simp- 
son,cIothes maker and owner of 
the Simpson store in Piccadilly, 
to increase pre-tax profits by 27 
per cent in the year to July 
311887. 

The £4JJm out-turn compared 
with £3. 88m in 1886 and was 
ahead of analysts' expectations. 
It was achieved on sales up 7.3 

pereentat£5034m. 

Mr Johnny Mongers, chair- 
man, said the improved margins 
were partly the result of moving 
the manufa cture of rainwear 
and leisurewear from Devon to 
a more efficient plant in Scot- 
land. But the company had also 
■sold well in export markets. 


Daks does hot disclose how 
much of ita income comes from 
abroad, either from tourists in 
London or tb rough direct ex- 
ports. Yesterday it played down 
the effects of the stock market 
crashes and the fell of the dol- 
lar by stressing that it was more 
dependent on Europeans than 
Americans. 

It admitted, however, that 
many customers were from the 
City and this may have an im- 
pact on Christmas sales. "Per- 
haps we might not see as many 
of them this year," said Mr Men- 
gers. 

The 27 per cent profits rise 
compares with percentage rises 
of 74, 73 and 52 in the three pre- 


vious years. 

Mr Mongers said that Daks 
Simpson would have to make 
acquisitions to achieve dynamic 
growth in future. The company 
was looking for something 
which had a peripheral connec- 
tion with clothing. 

Daks Simpson has net assets 
of £14. 75m (£12J*m in 1986) and 
net borrowings of £2m i£5.7m>. 
That implies gearing of less 
than 14 per cent. 

Last year earnings per share 
rose 32 per cent to 4&64p. They 
were helped by a proportional- 
ly lower tax charge of £l,8m 
(£1.51 m) The total dividend was 
lifted by 22.8 per cent to 8.6p. 


Sir James Hill 
disposes of its 
Sanderson stake 

Sir James Hill and Sons, the 
private company which made 
an unsuccessful bid approach 
this month to Sanderson Murray 
& Elder, has now sold the 8.1 
per cent stake it had acquired 
in the Bradford-based woolcom- 
ber. 

Hill said in early October it 
was prepared to offer 200p for 
each ordinary share in Sander- 
son. provided the board recom- 
mended acceptance and the 
principal shareholders agreed 
to accept But the board imme- 
diately replied that it saw no 
commercial merit in a deal 
Sanderson shares closed last 
night at 161 p. up lip on the day. 


By comparison, the £6Jhn 
cash call by food group. Hunter 
Saphir, in connection with its 
purchase of House of Clarks, 
saw a relatively succesfol 54.5 
per cent take-up.. Berkeley A 
Hay Hill, however, saw only a 
2.68 per cent clawback on its 
£2J3m open offer to sharehold- 
ers. 

Already this week, underwrit- 
ers have been obliged to pick up 
almost all of the £44£m issue 
from T. Cowie and the £29^m 
call by Heywood Williams, plus 
70 per cent of £27.5m issue by 
Sketchiey. Yesterday, the £143m 
call by merchant banking group 
KLeinwort Benson also closed 
with the shares 25p adrfit from 
the 450p rights price. 


All of these securities having been sold, this announcement appears as a matter of record only. 


6,000,000 Shares 


Class A Non-Voting Common Stock 


The NASDAQ symbol is SPGLA 


4,500,000 Shares 


The above shares were underwritienby the following group of U.S. Underwriters. 


Merrill Lynch Capital Markets 


ABD Securities Corporation ' The First Boston Corporation Bear; Steams & Co. Inc. Alex. Brown 8C Sons 

Incorponted 

Deu t sche Bank Capital DiUon, Read & Co. Inc. Donald son, Lufkin & Jenrette EuroPartners Securities Corporation 

Cwpo m im S uMiJm Cfiiyomop 

H am b rccht & Qitist E. F. Hatton & Company Inc. Kidder, Peabod y 6* Co. Lazard Frires 8C Co. Montgomery Securities 

hicofpotMed Inrorp muiAl 

Morga n Stanley SC Co- BaineWebber Incorporated Pradcatial-Bachc Capital Fundiitg - L. F. Ro thschild 8C Co. 

Iitc i ft i jww Mid Iacvxponmi 

Salomon B r others Inc Shearson Lehman Brothers Inc. Smith Barney, Harris Upbam 8L Co. Wertheim Schroder & Co. 

beaipaumd Incorporated 

Allen & Company A. G. Edwards & Sons, Inc. Oppe nhehner 8C Co., Inc. Thomson McKinnon Securities Inc. Advest, Inc. 

IiwnTyumul 

Robert W. Baird & Co. Ba t e m a n Bidder, Hill Richards BHF Securities Corporation Blunt ESis 8C Loewi 

hwpin d Incorporated Incorp ora ted 

Boettcher ft Company, Inc. Butcher & Singer Inc. Cowen&Co. Da mBoswo rth Epplex^ Guerin & Turney Inc. 
First Albany Corporation First of Michigan Co r por ati on Janney Montgomery Scott Inc. Ladenburg, Thalmann 8C Co. Inc. 
Cyrus J. L awrence Legg Mas on Woo d Walker McD o nald SC Com pan y Neubetger 8L Berman Pipers Jaffray Sc Hopwood 

Iacoipocned . ¥nun poii m l S m uiiM, Inr « Incorporated 

Prescott, Ball & Turben, Inc. The Robinson-Humphiey Company, Inc. Rotan Mosle Inc. Stephens Inc. Sutro BC Co. 

In co rp ora ted 

Tucker, Anthony & R. L. Day, Inc. Wheat, First Securities, Inc. The Chicago Corporation R. G. Dickinson 8C Co. 

First Manhattan Co. Furman Sdz Ma g er Dictz & Bimey GabcOi SC Company, Inc. Gruntal & Co., Incorporated 

J. J. B. HHHard, W. L. Lyons, Inc. Johnson, Lane, Space, Smith & Co., Inc. Edward D. Jones 8C Co. The Ohio Company 
Paxker/Hunter Rodman & Rensfaaw, Inc. Setdler Amdec Securities Inc. Underwood, Neuhaus 8C Co. 

I—tpnramf 1 Inanponted 

Wedbuah Securities, Inc. Branch, Cabell and Co mpany Carolina Securities Corporation First Affiliated Securities, Inc. 
Hayes & Griffith, Inc. The Ill inois Co mpany Kuhns Brothers 8C Laidlaw, Inc. McKinley Allsopp, Inc. 

Morgan, Ohhst ead, Kenn edy ft Gardner W. H. Newbolcfs Son 8C Co., Inc. Smith, Moore & Co. 

S mrnrg n M t Chffif* & SwimImi^i, Ine. Traub and Company, Inc. Van Kasper & Company Edward A- Vmer &, Co., Inc. 


The First Boston Corporation 


Bear, Steams & Co. Inc. 


1,500,000 Shares 


The above sham ware underwritten by the following group of International Underwriters. 


Merrill Lynch Capital Markets 

Commerzbank; Deutsche Bank Capital Markets Limi t e d DresdnerBank 

iV~* ,g *ttimginH»rtn(i 

f^wfaii Maibn I Jmtted Credit Suisse First Bofloo Limited , l | llf , l | lllll | Morgan Stanley Inte rnational 

N.M.Rodwhild&Sofa limited 5gie«tsonIriinianBrotfaeraTnTpmgfTonal Sii mil n i ii o FiiiancelD te t n g ^ S.G.Warbuig Securities 


DresdnerBank 

AHimgiiiHiftnfi 

Morgan Stanley International 


VjT* * ^ 




36 


Financial Times Friday November 6 1987 




TOTAL C0MPAGN1E FRANQA1SE DES PfTBOLES 

Consolidated financial position 
for Hist half 1987 

At its meeting on 4 November 1387, the Board of 
Directors of TOTAL COMPAGNJE FRAN^AlSf DES 
P&TROLES examined the consolidated financial 
position of the TOTAL group. The saltern features are as 
follows {in millions of Bench Francs): 


Turnover 

Cashflow 

Stockholding movements 
Cash flow, excluding 
stockholding movements 
Consolidated Group result 
Minority sh are 
Net Income (TCFP share) 


Year 

1986 

95,722 

4,114 

-7,500 

11,614 

-1,246 

(-775) 

-471 


1st Half 
1987 
44^452 
3332 
860 

2.772 

1,177 

(145) 

1,032 


The partial upturn in the oil price means that oil and gas 
production has regained more profitable levels. In 
Refining and Marketing, this has resulted in stockholding 
gains thanks to which this sector as a whole is now 
showing a slight profit 

The sale in August of the Italian refining and marketing 
subsidiary will be reflected in 2nd half figures as an 
exceptional profit of approximately 1 billion francs. 

Gross investment remained at a high level: 4,882 
million francs compared with 9,599 million francs for 
the whole of 1986. 

Overall forecasts for 1987 show that barring 
unforeseen events, particularly with regard to prices, 
the consolidated Group result should be somewhere 
between 2,000 million and 2300 million francs. 


FIDELITY GLOBAL INDUSTRIES FUND 
Sodete d’Investissement a Capital Variable 
23 Boulevard de la Foire, Luxembourg 
R.C. Luxembourg B24816 

NOTICE OF ANNUAL GENERAL MEETING 
Notice is hereby given that the Annual General Meeting of the 
Shareholders of FIDELITY GLOBAL INDUSTRIES FUND, a sodete 
tfinvestissement a capital variable organized under the laws of the Grand 
Duchy of Luxembourg (the "Fond"), will be held at the principal and 
registered office of the Fund, 13, Boulevard de la Foire, Luxembourg, at 
1130 am on November 26, 1987, specifically, but without limitation, for 
the following purposes: 

2. Presentation of the Report of the Board of Directors. 

Presentation of the Report of the Statutory Auditor. 

Approval of the balance sheet at July 31, 1987, and income statement 
for the fiscal year ended July 31, 1987. 

Discharge of Board of Directors and the Statutory Auditor. 
Ratification of the co-option of Campanile Ftdudaire as a Director. 
Election of seven (7) Director;, specifically the re-election of all 
present Directors, Messrs Edward C. Johnson 3rd, William L Byrnes, 
Charles A. Fraser. Hisashl Kurokawa, John M. S. Patton, H. F. van 
(fen Haven and Compagnie FWuciaire. 

7. Election of Coopers & Lybrand as Statutory Auditor.' 

8. Consideration of such other business as may property come before the 
meeting. 

. Approval of the above Items of the Agenda will require the 
affi r mati ve vote of a majority of the shares present or represented at the 
Meeting, with no minimum number of dares required to be present or 
represented at the Meeting in order to establish a quorum. Subject to the 
limitations irrjMsed by law and Ute Articles of Incorpor ati on of the Fund, 
each share is entitled u> one vote. A shareholder may act at any meeting by 
proxy- by order of the board of directors 

Dated: October 30, 1987. 


UK COMPANY NEWS 


Appletree pays 
£17.9m for Irish 
meat processor 


BY CLAY HARMS 

Anrf«4ree WnMh>p tti» I only to break even, at best in 

foods and fresh produce group, 

is to pay apto I£20m (£i73m) for year which ended on aeptem- 
Eildare Ch illin g and Kildare berSJO. 

Meats, an SSheef processor PoOTsmnmer miter <xuued 
and exporter. reduced demand for crisps and 

Kildare, which is privately snack* SLJSSLJff 
owned, achieved pretax profits sq«e«ed between its ursexzi- 
of£aam (and after-tax profit* of **“*• Nabisco and United Bu- 
&L9m because of Inland’s ltrw euits. 

tax charge) on turnover of £94m “cepfatmal wnt^off of poor 
in the 17 mouths to August 3l_ potato stocks which suffered 

The tax rate is expected to rise staruse prob lems. 

slightly to 16 percent next year. The fresh produce division. 

The company slaughter however, continued to trade satr 
about 7 per centof all beef cat- 

tie killed in Ireland and has a suits are expected to meet bad- 
weekly slaughtering capacity, get project! ons. 

Almost all of Its production is Armletzee is to pay an 
exported, with 74per emit of in cash antUssue shares 

sales made in the EC. n>Rm trained at th » vutn 


Appletree yesterday de- 
scribed the acquisition as a ma- 
jor step towards creation of a 


Kildare is likely to double the 
group’s earnings per share, Mr 
David Johnson, said 

yesterday. 

The company's need to spread 
its exposure was illustrated 
when it said that the Hunters 
snack foods division was likely 


worth fiLBm. valued at the 27Dp 
market price when negotiations 
started. This was precisely 
twice the price yesterday after 
the deal was announced. 

Additional payments totalling 
up to £Sm are based on profits 
in the three years to September 
1890. British & Commonwealth's 
stake in Appletree will tell be- 
low 23 per cent as the result of 
the share issue. 


John J. Lees pushes its 
profits up to £220,476 


Jdm J. Lees, confectionery 
maker, edged taxable profits 
ahead slightly from £21i£300 to 
£220,478 on turnover up from 
£2-39m to £2.9m In the half year 
to September 30. 

The directors declared an in-r 
terun dividend of 0.625p - np 


the second half to be inline with 
those of the first 

He said that the company had 
a good first half although export 
markets remained Jiwi , nit as a 
result of the weakening dollar. 
Investment plans were being 
finalised for Heather Cameron- 


earnings per 
fell from an 


from an adjusted QJSp last time - Foods with a view to ntn^Bring 
and after tax of £87 491 (£69 J963), production capacity. It dLdnct 
ordinar y sha re a significant contribu- 

usted figure of (too from its summer acquiai- 
, - . . „ . _ tion. Fullers, a con fec ti on ery 

chairman said that cor- maker, nntil next year. 

rent objectives were to eonsoli- 

date progress made in recent Minorities a ccounted for 
years’ andto implement plans £18*71 (£14358) and attribot- 
to generate future earning s able profits rose from £128£89 
growth. He expected profits in to £134*314. 

Stanley Miller in the red 


THEN MARGINS, a contract 
claim and reorganisation costs 
combined to push Stanley Miller 
Holding* back Into loss for the 
first luflf of 1987, representing a 
swinground of £500,000. 

The group, main work of 
which Is building contract in g, 
returned to profit in 1988, mak- 
££80,000 for the first half and 
XL000 for the yeec. Now it has 
turned in a loss of £421,000 from 

a turnover op to £Mm CEliaftbk 
The directors said the year 
would remain difficult for proF 
stability, but steps taken should 
ensure a greater degree of pros- 
perity in fixture. They are bold- 


fi g tec tro co mpongnt i pk 


Record interim 
results and. 
/Viisco acquisition 


Interim Results To 30th September 1987 

£ Sales up 18% to £134.9 million 
Q Pre-tax profits up 1 3% to £20.5 million _ 

A Earnings per share up 1 2% to 6.42p 
Q Interim dividend up 15% to 1.27p 
Q Acquisition of AflISCO for £11 million 

The success of the Group continues 
with RS Components launching its largest 
ever catalogue. 

STRATEGIC ACQUISITION OF AOSCO 


distributes computer ' 
supplies and accessories through mail 
order catalogues in the UK, Germany, Italy 
and the USA, This acquisition gives 
Electrocomponents an immediate 
presence in the fast-growing computer 
supplies market. 


A copy of the Interim Report is available from the Secretary, 
Electrocomponents pic, 2 1 Knightsbridge, London SW1X 7LY 


ing the interim dividend atOJSp. 

Shareholders were told that 
much of the increase to torn- 
over came in tender work; 
where margins were extremely 
thin. Steps were taken to im- 
prove the quality and diversity, 
and consequently the ra pqgiim, 
of the work. 

A large claim was suffered on 
a contract which was completed 
to 1962. Settlement and legal 
fees came to £100,000. 

A~ similar amount was spent 
on reorganisation earlier this 
year, while preliminary costs of 
setting up the new housebuild- 
ing company and the reorgani- 
sation of the London activities 
.created additional expense. 


Alva Trust assets up 

Alva Investment Trust upped 
net asset value per 25p ordinary 
share from 189.2p to 265£p at 
the end of the 18-month period 
to August 31 1987. 

The directors propose a final 
dividend of L3p compared with 
Ip last time, making a total for 
the year of 34p C23pX Tax 
charges took £25,483 (£19,499) af- 
ter which earnings per share 
moved up from I28pto5.02p. 

Gross revenue amounted to 
£311,083 (£243^17) and expenses 
and interest took £187464 
(£168496). Last time's extraordi- 
nary debit of £50,000 was not re- 
peated. 


CRASH FORCES PROPELLER TO RE-ARRANGE FLOAT WITH £1-5*1 TAG 

Dancing to the market tune 


BY PHILIP COQGAH 


THE IMAGERY was strikbK. To riling a man’s shirt appeared 
the strains of the song •f am white the mnsi c. cha nged to 
whit 1 am* - from the teasm- "Last Trato to London*. 

Ute musical "La Cage uux The male was not the maoag- 
FoDes* - four yvnng gma wear- ^ 0 f Fropriter, Ifr 

tog men’s shirts leapt athleti- S!*- Dabbs. He had to miss the 
caUy onto the stage. Last Train to London as he wu 

Some razxmataxe was perhaps t* Hong Kong, checking out the 
inevitable. FtppeDer, a men’s latest fashion shows, 
shirt designer, was attempting ... 

to be the first company to float That unfortunate c o in c id e nce 
m the Third Ma rke t of timing was a direct result of 

crash So yesterday's press con- the crash. Propeller had 
ferencc was held not at some so- planned to join the market last 
her City venue but «t Stringfri- week and the hastily re-ar- 


low's, the night dob haunt of all 
those people who sat men- 
tioned in the gossip commas. 

The girls gamely danced on 
g ffit-ji . inventively - a ,wb " mod- 


ranged launch had to be at a 
lower share price - 45p against 
SSp - and raise a smaller 
amount - £L5m against £2LSm - 
than originally hoped! 


Mr Mike Keen, Prop eller's 
WAS putting A DlSYU 
foce on the change in timetable. 
He had good reason to be chaeir* 
ftiL His Third Market mtoi-cati- 
Cortos Beach hid 
ipeUer in September 
1966 as pan of the loss-making 
textiles group Tern 

The whole of Tern bad cost 
just £im but now Gorton Beach, 
having sold off the rest of Tern, 
is floating off Propeller with a 
market capitalisation of l&Sni 
Its remaining 56 per cent stake 
In the group will thus be worth 
more than 13m and in add iti on 
Propeller will use more than 
half its share of the placing pro- 


ceeds to pay off a £698,000 loan 
to the parent group. 

Propeller subcontracts all its 
manufacture and sells finished 
goods to retail chains like Bur- 
tons and Top Man. In the 13 
months ended January 31, 1987 
the group made pre-tax profit* 
ortSHJWO on turnover or£9,5m; 
it Is f@y®eaattog profits of not 
less than £408900 for the com- 
ing year. 

Just under 3J3Cm shares, 28 
per cent of the enlarged equity, 
are being placed by sponsors 
Headline Moss, putting the 
shares on a prospective p/e of 
li Mr Dabbs, who is selling 
some shares, will retain a 17 per 
cent stake. 


Halftime fall at Grampian TV 


Kp i f t fftffi , ra ft mie which might cause a drop in' 

tractor for the North of Scot- the year’s profit ^ ^ 

land, is warning of a passible 
drop to profits for 1987-88 from 
the £L7?m of the previous year. 


Pre-tax profits were halved 
from £128.458 to £224536 to the 
six months ended August 31 
1987. Sir Iain Tennant, chair- 
man, said the second half tradi- 


Turnover to the six months 
came to £8fon (£8-78znl Nation- 
al advertising revenue contin- 
ued to outpace inflation but the 
trend towards placing that is 
the south and south east of En- 
gland continued. 

The subsidiaries continued to 


the bulk of expand. Glenbunzie 
profitability but pointed to sing- again increased its contribution 
gjqh national a d v ertis ing rove* while Blenheim Travel carried 


anils development programme. 
Because of costs a s so ciate d 
with that, it was not expected to 
be in profit in the current yasc. . 

Blenheim acquired three new 
retail outlets to the north east 
of Scotland. Several farther 
units were planned within the 
coming year. 

Earnings for the period were 
reduced to 096p (L87p) and the 
interim dividend is again 0-43p, 


Five Oaks rises to over £2m midway 


Five Oaks Investments, prop- 
erty development group, 
achieved a significant increase 
from £839,000 to £2.18m to pre- 
tax profits for the year to end 
June. Turnover was £Hfi?m. 

The 1985/86 profit has been 
adjusted to give effect in re- 
spect of profits and losses on 
rale of investment properties 
and the frilly diluted earnings 
figure for that year has been ad- 
justed for this accounting policy 
change and to respect of the bo- 


nus element of the 1908 rights 
issue. 

After tax of £596442 (£3^96) 
the folly diluted earnings were 
7-14p (7-5 pX With the 1986417 fig- 
hm reflectiM rijnBgaiit muiw- 
stream corporation tex for the 
year. 

As foreca s t, a ret ur n to the 
dividend list is proposed with 
the payment of lp per Dp ordi- 
nary. 

The directors said the invest- 
ment portfolio performed well. 


producing a revolution surplus 
of £546,000, Net asset value at 
the year end was 5L5p Q&JBp). 
They said the company has a 
high-quality development pro- 
gramme totalling 62/000 sq ft 
which it estimated would have a 
sale value on completion of 
£44m. 

Some 70 per cent of the com- 
pany's share capital was now to 
institutional bands and the 
board looked forward to the 
next phase of development 


Sykes In 
£10.5m USM 
flotation 

Sykes-PlcksvanL toe hand- 
tool manufacturer, an- 

nounced details of its flotation 
on the Unlisted Securities Mar- 
ket Albert K Sharp is placing 
1.66m shares, 18 per cent of the 
equity, at 114p giving the com- 
pany a market capitalisation of 
£20L5m. 

Just one quarter of the shares 
being placed axe new with the 
rest being sold by existing 
shareholders. Sykes is forecast- 
ing pre-tax profits of £L4fim tor 
1987, up 10 per cent from .toe 
previous year, giving a prospec- 
tive p/e at the placing price of 
10-5. 


SdKaCruz 

Sousa Crux, the Brazilian com- 
pany which is 75 per cent owned 
by BAT Industries, reported net 
financial income of GaA228J5m 
for the 9 months to end Septem- 
ber 1987 and a net profit of Cx 
a^ieSLBm. or CM35A per share 
before a 20-for-one share 
Cx6l 8 after. 


split. 


The directors say compari- 
sons with 1968 are not given be- 
cause last year was divided into 
accounting periods of two and 
ten mouths by the introduction 
on February 28 of the Cruzado 
Plan. However internal man- 
agement information shows 
that, compared to the same pe- 
riod last year toe results repre- 
sent a nominal, almost three- 
fold increase. 


BOARD MEETINGS 


Uw . 

board 


fcflowtag eorpan toa ham ncBfad dan* of 

ri maa O i ga to too Stock Exchange Such 

ImMi uauMy how tar tot pupaoo ol«n- 
ismte. Official insertion* sf ■ 


fUftMKMXES 


AAH 


atooring tSrfdanda. Official Mcrtlona an not AborfcwtoHc 
MSaUBmtovhMhartoeAridandsamlnlBfkmi ASecH-yons 
or Bnafe and toaaUb-<Mtkm short) bekwam ErgWiXM 
bmadiBttrtirenkmtymm'a. TaSStj^M 


twtoHSdngs. 


Yato and Valor. 


Mnkmt- 


totorioia- AquamOaiL IlmdaMO AttHW* 
don. Hu4na Qroop. Rancid 
Ftoato-WWamLowL 


Concertrio 


Trmt 


WHtanaMTMHoUngs- 


Nw IB 
Navis 
OKI 

Nov 10 
Nov 24 
Nw 12 

Dac 3 
Navis 

Nw 10 
Ho* 11 


Hanover Druce up 17% 


DIKECT0B8 OF Haaever 
Brace, estate agency and finan- 
cial services group, expect the 
rising trend of the past four 
yean to continue following an 
I m proved start to the present 
Tees. 

On turnover up 38 per cent 
from £5u78m to (TJte, pre-tax 
profits roam to £902,000. against 
£768,000. a rise of 17 per cent to 
the halfyearto August 31 3987. 

Earnings per lOp share caume 
out at 83p (9-5p). The interim 
dividend is being raised to L33p 


le dir ector s said that It was 
too earty to see what effect the- £31*400 <£27B,0O(& 


recent turbulance on the stock 
markets would have on the 
properly market but the need 
for professional advice would 
continue. 

■ With the company’s broad 
spectrum of property-routed 
services, the company was well 
placed to build on its success. 

During the period under re- 
view the group acquired and 
opened 12 offices bringing the 
total to 66. 

Operating profit was £865^00 
C£752j00Q) with a farther £37,000 
(£16,000) from related compa- 
nies. The tax charge 


Amber Ind up 
at halfway 

4 ei b s i Imtu i trl ri B a llings , toe 
industrial aerosol manufacture 
ier controlled by the Cayser fam- 
ily’s Caledonia Investment*, re- 
ported increased, profits in toe 
ihatf~5*ar to September. 

On tnrnover up from £iton to 
£A9m, the pre-tax figure came 
out 8 per cent higher at £553^)00 
<£512^MX After tax of £203,000 
(EUHL000), earnings per lOp 
share worked through at IKSp 
0i2pX 

The directors said the in- 
creased profit was attributable 


to the 


Bdprofiti 

Ambersil 


subsidiary. 


FAI sells Hffl 
Samuel stake 

ItyftteimiBuHar 

FAI Imntri, the invest- 
ment arm of Australian estre- 
premwr Mr Larry Adler, raid 


yert erda y that it had accepted 
the TSB offer for its 14.7 per 
cent stake in Hill Samael, and 
showed a profit on the shares of 
A$I31m (£5L4xo), not including 
a final dividend payment of 
A|L49m. 

Mr Adler said that FAI now 
bad cash reserves of about 
A$800m and saw 'Interesting' 
investment opportunities dne to 
the current volatility to share 
markets. 


Brit Borneo profits jump to £1.3m 


British Beenes Will a le am, an 
Investment holding and 
company^ boosted 
its tty 47 per cent 
to £L31m in toe six m o nth s to 
end September. 

A breakdown of its income 
shows that income from invest- 
ments amounted to £881433 
(£850,708)- Deposit interest and 
other income totalled £1 18^212 
(£76,481) while profit on dealing 
activities rose- from £55,241 to 
£486^56. 011 and gas production 
accounted for £4594 (£L321 )l 
T here was a loss on currency 


co n versions of £12,448 (£4274) 
and adminstration expenses 
were £72,551 (£88^431 An 

amount of 248439 (£16,618) was 
written off US oil and gas inter- 
ests and exploration expendi- 
ture in Canada was £1,976 
C£l,42O).Ther0 was no interest 
payable this time agatost 
£10,425. 

After tax of 2405J33 (£264,432) 
distri but able profits were 
£899,372 (£628,289) for earnings 
of 19l9P (13Dp) per 10p share. 

' The interim dividend is in- 
creased from 7p to 7.5p. 


EFT winning City of Edinburgh battle 


BY JAMES BUXTON, SCOTTISH CORRESPONDENT. 


Edinburgh Financial Trust, 
toe Scottish financial services 
company, Iim outmanoeuvred 
Aberdeen Fund Ma na ge r s to a 
battle for City ofEdtobnigh Life 
Assuran c e Company. 

Aberdeen Food Managers an- 
nounced yesterday that on Octo- 
ber 26 it had made an offer to 
purchase the whole issued 
share capital of City of Edin- 
burgh at aprice which valued it] 
at £23m. City of Edinburgh has 
approximately £2Sm of policy- 
holders’ fluids. 

But on the same day Edin- 
burgh Financial Trust an- 
nounced that it had increased 
its holding in City of Edinburgh 
from 28 to 41 per cent by pur- 
chasing shares held by Steven- 
ston Securities. EFT and Ks ally 
MEM Ltd, investment manage- 
ment company, together held 

On’october 30 a°nu§ori& of 
directors of City of Edinburgh 
agreed to recommend to share- 
holders that they accept the of- 
fer from Aberdeen Fund Man- 
agers. Two days later Professor 
Donald Mackey, chair man of. 
City of Edinburgh, toldtoarn 
holders that EFT and MlM bad 
indicated that they did not in- 
tend to accept the Aberdeen 
Fund Managers offer nor to 
make a general offer for the 

company. 


At the first closing date for 
Aberdeen Fund Managers’ offer 
Wednesday morning, share- 
holders representing only 3&8 


per cent of the equity had ac- been extended until further no- 
cepted the offer. The offer, ti ce. 

which Is conditional on at least EFT gave up its trust status 
50 per cent acceptances, has earlier this year 


NOTICE TO HOLDERS OF 

The Hyogo Sogo Banks Ltd. 

(Incorporated in Japan) 

U.S. $100,000,000 
1%% Convertible Bonds 
Due 2002 (the “Bonds") 

Pursuant to Clause 7 OB) and (HI of the Trust Deed dated 
22nd June, 1987, notice is hereby given that because of the 
issuance of new shares on 1st November, 1987, the 
conversion price of the Bonds has been adjusted as followa: 

1. ' The conversion price of the Bonds in effect before such 
adjustment was 1,117.30 Japanese Yan per share of common 
stock and the adjusted conversion pries of foe Bonds is 

1,1 15J90 Japanese Yen per share of common stock. 

2. Such adjustment took effect as of 2nd Navanfoer, 1987 
(Tokyo Time). 


6th November, 1987 


The Hyogo Sogo Brak, Ltd. 

By: The Sumitomo Bank, Usutad, 
as Principal Paying, Conwenkn 
and Replacement Agent. 


Yorklyde 
static at 
half year 

AFTER A feiriy slow start to the 
season following last winter's 
diOcalt trading period, York- 
tytie, Huddersfield-based cloth 
and rug maker, announced an 
increase of just £5.000 to pre-tax 
profits for toe six mouths to July 
3L 

Oft turnover ahead from 
£&84m to £4.04m the taxable re- 
sult came out at £L16m. The di- 
rectors said the group currently 
had a healthy order book and 
interest to its products was 


are the in- 

torim dividend at Z75p, payable 
from earnings per lOp share of 
16. lp (16pX Tax charged was 
£406^0 00 (£4Q4j0Q0k 

First half 
fall at E & A 


Profits of EUtetes St Agency 
Holdings declined from £333JX» 
to £312,000 over the first six 
months of 1987 despite an im- 
provement of £100,000 in gross 
rental income to £974j00a 

Below the line, however, 
there was an e xtra ordinary 
credit of £380000 being the net 
profit from the sale of the hold- 
ing to Western Motor Holdings. 

The directors pointed out that 
as a result of the sale there was 
no income from this source un- 
der the heading of related com- 
panies - to the comparable peri- 
od of 1986 the contribution 
amounted to £76j000. 

Earnin gs for the opening half 
year; *»»ii[ifling the extraordi- 
nary item, emerged at 4.16p 
(4J3pX 

Contracts were exchanged 
last mouth for the sale of a de- 
velopment site at Rayleigh, Es- 
sex, at a net loss of £150,000. The 
company foiled to obtain satis- 
factory planning consent on ap- 
peaL 


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TEOUiSUUDEN VOtMA 0Y 
(TV0 Power Company) 

US$1 00,000,000 
Floating Rate Notes due 2004 

Notice b herelgi given that the 
Rate of Interest for the second 
Interest Subperiod of the Interest 
Period ending on Uth January, 
1988 has been fixed at 7,i% per 
annum. The amount payable for the 
second Interest Sub-period will be 
US$61.98 and will be payable 
together with the amounts for the 
first and third interest Sub-periods 
of the sakl Interest Period on 11th 
January, 1988 against surrender of 
Coupon No. 15. 

Mamdacturers Kraover Limited 
Agent Barit 




Notice to the Holders of 


(Kabushfld Kaisfaa Fuji Ginko) 

(incor porat ed with limited liability in Japan under the 
Commercial Code of Japan) 

U.S.S100 S 000,000 

2% per cent. Convertible Bends 2000 (the “Bonds") 

Famatt W Ckns 6 (E) and (H) OdH) of tbr Tma Deed (the "Thm Deed") 
daKdXMb September, 1985, In respect of ibe above kmc, notice if hereto 
atfiflosK 

(11 Oa 22ad September and 8d> October, 19*7. toe Bawd of Directors of ito 
Baak neadved to isme 35 JXOJJOO dam of Cteanoa stock of ibe 8mk U of 
Septcmlw a 9, 19B7, m the innf price of Yen 3,146 per Share. 

O) AeeordbtdS. t be Coavown Price of the Boods «as adjuned pniinaro to 
.Chose 6 (H) of the That Deed effective at fro m ibe 29th Qaoba. 1987 
Ibkyo Tunc. Tbc Coovtnioo Price before adjnstman ins Yen 3,623^0 per 
Share «ad tic Coovtoioa Price iftcr jtdjtauaox is Hen IJSZ2JD pec Share. 


flhKomte; 19*7 


The Fug Bank. Limited 
W, Otnacbi i-cbocK, 
ChbotMoi, Tokyo, Japao 




Times Friday November 6 1987 


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COMMODITIES AND AGRICULTURE 


Financial Times Friday November 6 1987 


Peruvian copper strike spreads 


BY DOREEN GILLESPIE IN UMA 

PERU’S ENTIRE copper produc- 
tion is threatened with being 
halted as the workers of other 
major producers join in the stop- 
page begun a week ago by those 
at Cuajone, the country’s biggest 


at Cuajone, the country's biggest 
copper mine. 

Peru produces around 400,000 
tonnes of refined copper a year 
of which 85 per cent is exported. 

The Toquepala copper mine's 
17,000 workers and 480 at the Uo 
smelter, which like Cuajone are 
owned by the US-based Southern 
Peru Copper Corporation, came 
out on strike at 7.30 on Thursday 
morning. The company Kid that 
force majeure had not been de- 


clared and that 600 of its service 
personnel who handle copper 
shipments were still working. 

The Southern Peru mines pro- 
duce 250,000 tonnes a year, 
around two thirds of Peru s an- 
nual copper production. Its min- 
ers are presang for a solution to 
a 40 point claim mainly for pay 
increases and improved working 
conditions. They are also asking 
for the company's nationalisa- 
tion, a routine demand from 
Southern Peru's labour unions. 

Meanwhile workers at the 
state-owned Tintaya copper 
mine, which produces 80,000 
tonnes a year, also came out on 


strike inmid-week. The miners* 
federation is reported to be try- 
ing to bring out other state- 
owned copper mines like Cobriza 
and Cerro Verde, while the coun- 
try's Labour Ministry is holding 
talks with the unions in an effort 
to negotiate an agreement. 

Copper is Peru’s biggest single 
foreign exchange generator with 
exports last year of $43&2m out 
of a total S«L5bn. Total metals 
exports including silver, lead and 
zinc make up 40 per cent of 
Peru’s exports. Copper exports in 
the first half of 1987 totalled 
S225.7ro compared with 5228.9m 


in the first half of last year. 

Southern Peru says it is to in- 
vest Slim next year in new 
equipment to improve 
day-today operations mainly in 
its concentratom. This will in- 
clude installation of automatic 
grinding controls at Toquepala. 
Similar equipment at Cuajone al- 
lows administrative staff to con- 
tinue to operate the concentrator 
at 40 per cent' of capacity during 
the strike. The company Is still 
holding fire on planned expan- 
sion of the Cuajone am! Toque- 
pala mines which would require 
an investment estimated at 
around iSQOm. 


Oil outlook 
backs Opec 
hopes for 
new ceiling 

| By Richard Johns 

■THE LATEST projections by the 
1 International Energy Agency in- 
dicate that oil demand in the 
first quarter of 1988 should give 
the Organisation of Petroleum 
Exporting Countries reasonable 


Pacific Islanders forced 
to tighten their belts 


LME price rises as supply fears grow 


BY KENNETH GOODING. MIMNG CORRESPONDENT 


MARKET CONDITIONS have al- 
ready encouraged speculators to 
take more than their usual inter- 
est in copper. 

And analysts believe the 
spread of strikes in the copper 
mines of Peru will be bound to 
push up even further prices al- 
ready near a peak because of 
supply shortages. 

There is some evidence that 
speculators have been buying up 
as much physical copper as pos- 
sible and are now holding on to 
it firmly in the hope of forcing 
the price up. 

‘A genuine tightness of supply 
has encouraged some speculative 
activity*, says Mr Robin Bhar of 
Rudolf Wolff, the metal trading 
group. 

*It is a cat and mouse game. 


Those people holding physical 
stocks of copper off the market 
wont deliver until the premium 
becomes big enough”. 

Mr Bhar recalls that in 1973-74 
when London Metal Exchange 
copper stocks were at an low of 
10,475 tonnes, a 5200 premium 
for cash metal over Che forward 
price (backwardation) was 
needed to prise copper out of 
speculators' banda 

Yesterday the premium 
readied 5123 as the LME cash 
price rose 525 to 514345. 

Meanwhile the three month 
price of grade A copper fell by 
51 to 51,122, reflecting fears that 
demand will eventually be dent- 
ed by economic problems in die 
US. 

According to Mr Stephen 


US offers subsidised 
poultry to Middle East 


BY NANCY DUNNE IN 
WASHINGTON 

THE US Department of Agricul- plaint, saying it had been driven 
ture has made new offers of sub- out of the Middle East markets 
sidised poultry in its drive to by French and Brazilian subsi- 


help American producers recap- 
ture markets lost to France and 
Brazil in the Middle East. 

Mr Richard Goldbert, acting 


The complaint went to non- 
Inding arbitration under the 
sieraT agreement for tariffa on 


undersecretary of agriculture, trade, but it still remains unre- 
has announced two ‘opportuni- solved. 


ties* for the sale of frozen 
try under the controversi 


ml- According to a council econo- 
ex- mist, the US share of the Middle 


port enhancement programme. East poultry market fell from 50 
Saudi Arabia has been made eli- per cent to zero before the ex- 
gible for 20,000 tonnes, and five port enhancement programme 
gulf states - Bahrain, Kuwait, was launched. Domestically, 
Oman, Qatar and the United Ar- prices have fallen below the cost 
ab Emirates.- have been offered of production, he said. 

1&000 tonnes. Unless export demand rises. 

The offers represent an expan- prices are likely to fall further, 
sion of the subsidy programme The USD A said this week that 
in the Middle East.. Only Egypt- meat and: poultry, production is 
and Iraq- have been previously likely to reach record levels in 

Jjeert offered frozmbroilere. _ . 1088... 

Egypt has thus far bought Poultry production is about 7m 
74,000 tonnes and Iraq has tonnes a year with 350,000 
bought "60,000 toi mes. ~Last ^ -formes going to -the export mar- 
month the USDA offered an ad- ket.*Mr Richard Lyng, US Agri- 
ditional 20,000 tonnes to Iraq. culture Secretary, who is visiting 
The US launched its export en- Madrid, said he would continue 
hancement programme in 1985 to put pressure on the EC not to 
after failing to convince the EC impose a consumer tax on oils 
and Brazil not to subsidise farm and fats, Reuter reports. Wash- 
exports. In 1981, the National ington would retaliate if it went 
Broiler Council filed a trade com- ahead. 


Briggs of Shearson Lehman 
Brothers, any volatility in the 
copper price can usually be 
traced to the US and the pros- 
pects for the main user indus- 
tries' - construction (particularly 
housebuilding) and motor vehi- 
cles - are currently looking dim 
in the States. 

Mr Briggs estimates that T-ME 
copper stocks axe now at a criti- 
cal level, equivalent to about 
four weeks consumption, com- 
pared with the normal six or sev- 
en weeks. They cant go much 
lower,” he says. 

The recent sharp fall in stocks 
could have been caused by spec- 
ulative buying, he says. 

Stocks have been whittled 
away because demand has out- 
paced supply for nearly four 


years and Mr Briggp suggests it 1 
will not be until next year that 
producers can turn the situation 
around. 

In more normal circumstances, 
strikes in Peru would not cause 
much disturbance to the copper 
price because disputes seem to 
be endemic In the industry 
there. 

However, although Peru Is re- 
sponsible for only about 6 per 
cent of total non-socialist world 
copper production, it Is an im- 
portant element in the market 
because so much of its output is 


In Mr Bhar's words: "Senti- 
ment about copper was bullish 
before. The strikes in Peru are 
underpinning that sentiment'. 


Flower exporters urged 
to sharpen marketing 


BY LAURA RAUN « AMSTSHIAM 


FLOWER AND PLANT exporters 
in third world countries should 
sharpen their supply and mar- 
keting skills in an effort to wid- 
en their increasing share of glob- 
al markets, according to Mr 
Jeremy Pertwee, an organiser of 
the International Floriculture 
Seminar held in Amsterdam this 
week. 

He urged South American, Af- 
rican and Asian countries as well 
as more established producers to 
go directly to retail store chains 
to create outlets instead of sell- 
ing to auction houses. But he 
emphasised that growers must 
deliver frequently to inner city 
stores and ensure high quality, 
consistency and cleanly pack- 
aged flowers and plants. 

. “Few stores have .much steer- . 
age, other than their shelves, 
that they would be prepa re d to 
give up to flowers, so the deliv- 
eries need to he made twice a 
week, ready- far- tbe-sheH,* he- 
told participants at this week’s 
seminar in Amsterdam. Plants 
should be cleaned, sleeved in 
plastic, labelled with the store's 
own brand label, priced, with a 
sell-by date and in some in- 
stances bar coded, he said, (hit 
flowers required the same treat- 


ment. 

In the forefront of Third World ' 
producers of horticultural prod- 
ucts are Central and South 
America, notably Costa Rica 
with pot plants and Colombia 
-with cut Sowers. Sri tanka is 
quickly bonding up exports of 
young plants while Singapore is 
nurturing palm tree sales abroad. 

Third world countries are 
keen to develop the horticulture 
industry because it is labour in- 
tensive and requires relatively 
little land while earning hard 
currency through exports. More- 
over, exports often stimulate 
flower and plant sales at home. 

Mr Pertwee, who heads up 
Fathfast of Essex, cast aside wor- 
ries that newly producing coun- 
tries would glqt the wand mar- 
ket with horticultural products 
and drive down prices, the mar- 
ket is growing so fit'lfitt* de- 
mand is ample enough to absexb 
greats* sunpHes, he contended. 

The Netherlands continues to 
dominate the world trade in cut 
flowers with 63 per cent of the 
FK2bn market in 1986, a market 
that was up 17 per cent from the 
year before. But Dutch nursery- 
men are worried that their world 
market share has dwindled 


Even if production discipline is 
observed during this period, 
however, Opec is likely to be 
squeezed in the second quarter 
ss consumption falls and non-O- 
pec production rises, the forecast 
In the IEA's latest monthly ofl 
market report suggests. 

The requirement for Opec oil 
is calculated by the Paris-based 
agency at 19.1m barrels a day far 
the January-March period - as- 
suming neutral stock move- 
ments. But its calculations show 
it falling to 18.9m b/d in the 
second quarter of 1988. 

The IEA reckons that Opec 
crude output in-October ran at 
19m b/d, largely because of 
higher Iranian production aver- 
aging 2.4m b/d, compared with a 
level of 18.7m b/d in September. 
The current rate has been put at 
17Jxm-l8m b/d by Mr Rttwanu 


Stocks were built up substan- 
i tially during the third quarter of 
this year. Those on land in mem - 1 
ber states of the Organisation far 
i Economic Co-operation and De - 1 
vetopment rase at a rate of L7m 
b/d. 

Total supply, though, exceeded 
1 consumption by 2.6m b/d, sug- 
gesting that non-reported stocks 
(mainly in transit and outside 
the OECD are) increased by 
600,000 b/d. 

I The IEA does not comment on 
the extent to which the build-up 
may have been caused by the 
: crisis in the Gulf and fears of a 
cut-off supplies through the 
Strait of Hormuz. 

According to the IEA's esti- 
mates OECD stocks-on-land at 
the beginning of October were 
450m tons or 19m tons more 
than at mid- 1987. But they were 
the eqidvaloit of 99 days Jbr- 
wardsconsumpftton^timost exa- 
ctly the same coverage as one 
year earlier. 

•Oil prices weakened again 
yesterday on both sides of the- 
Atlantic by 20-30 cents with, 
Brent Blend down 20 cents at 
*17.80 towards the end of Euro- 
pean trading. West Texas Inter- 
mediate hadfallen by 30 cents to 
$18.85 by noon in New York. 
Rices have registered losses of 
70-90 cents since last Friday." 


CASSAVA WAS last week being 
traded in a street market in Nn- 
ku'alosa. the capital of Tonga, at 
TS7CSZ.75) for a 5kg basket 
which would normally have 
fetched TS% an 8kg water melon 
changed hands for TJZ5 - normal 
priceTSS. 

For the islands of the South 
Pacific, however, these are far 
from normal times. Many posts 
of the region, which usually has 
generous amounts of rain, are 
emerging from their worn 
drought m living memcoy. last 
week of October a number of 
countries enjoyed their first Titer 
fall for almost six months. 

While food output is generally 
lower, there will be no wide- 
spread hunger in the rari on, al- 
though emergency food aid is 
needed in some areas. 

Most people have enough to 
eat hi the Pacific - in F© the 
dbeshy rate is almost £0 per cent 
more o verwe i ght people In Fiji 
than there are in Britain - and 
the shortages are chiefly making 
themselves felt in higher *»■»**«: 
prices. Purses no longer stretch 
to buying as much as before. 

Economies in the region are 
generally he&vDy dependent on 
s ub s is tence agriculture and often 
on a single export crop. Fear ex- 
ample over two-thirds of Tonga's 
total export earnings, come from 
coconuts, making the country 
highly vunerable to price 
changes on world markets. 

The subsistence nature of agri- 
culture, means that people in ur- 
ban areas are bearing the brunt 
of the drought with farmers 
keeping more of their food rath- 
er Qian taking it to market 

While drought has increased 
food prices in many islands the 
combination of drought plus 
post-coup economic depression 
has forced them down in FQL, 
Drought is particularly s eve re in 
the North and east of the main 
Islands, Vlti Leva. 

Wells .have dried up, cattle are 
dying through lack of fodder and 
the United Nations Development 
Programme Office in Suva has 
received a request for help. 

Ominously for a co untry that 
earns around half its export 
earnings from sugar only 18 per 
cent erf next ydhr’s sugar crop 
has so far been planted In the 
hard saQ; around 70 per ia 
normally planted out by this 
time. 

. Hjian formers who take their 
goods to sell in the capital Suva 
race the problem that their ur- 
ban custontera have less money 
to spend in the current depres- 


sion. Large piles of unsold per- 
ishable foods are to be seen most 
days in Suva's main food market. 
One goatkeeping farms- be- 
moaned that gent prices had fall- 
en from $220 a kg to $150, "bare- 
ly enough to cover my costs of 


would probably increase this 
year from 55m to 6m tonnes. 
Taro, which is eaten Uke pota- 
toes Is a major commercial as 
well as subsistence crop in Ftp 
and Tonga. It is exported chiefly 
to Australia and New Zealand 
where there is a sizeable demand 
f r o m Pacfic Island exiles. 

Although conditions in the re- 
gion favour palm trees doubts 
are growing about the wisdom of 
increasing palm oil acreages. Ex- 


pansion taking place especially 
in Papua New Guinea and the 
Solomon Islands is seen as con- 
tributing further to already de- 
pressed world prices 
Little rice is grown cm the Pa- 
cific Islands although in some 
countries, notably Fiji, there ap- 


Parts of Northern Papua New 
Guinea have also been striek- 
ened by drought with the coastal 
town of Madang severely affect- 

As a six month 
drought ends 
John Madely 
looks at the 
region’s food 
industry 


ed byshcctagea. Relief aid from 
the US has been sought. 

The region's export crops are 
generally holding up well, al- 
though depressed world copra 
prices me leading some formers 
to conclude that harvesting coco- 
nuts is not worthwhile. Cocoa 
will this year replace copra 
(dried coconut kernels) as the 
major export agriculture earner 
for the Solomon Islands. 

In Western g am e s, e xp ert s nf 
the root crop taro have replaced 
copra as the country’s mam for- 
eign exchange earner. Mr Tupola 
Tavita, the country's Director of 
Agriculture, estimated that 
around 2Q/XX) tonnes of coconuts 
would this year be harvested in- 
stead of the normal 25,000 
tonnes. 


pear? to be potential to increase 
output and cut down cm imports, 
whfch come chiefly from Austra- 
lia. Promotion of new agricultur- 
al exports from the region in- 
clude sales from Tonga of vanilla 
and pumpkin to Japan. 

The UN Industrial Develop- 
ment Organisation is funding a 
number of projects in the region 
to process agricultural products 
into manufacturered goods. In 
Tonga the floors of (he Ministry 
of Foreign Affaire ore covered 
with tiles matte from coconut oiL 
Starch is also being made from 
cassava pellets . 

A factor hindering agricultural 
planning in most Pacfic Island 
countries is the lack of reliable 
statistics - one island is today 
making policy on 1961 statistics 
The UN Food and Agriculture 
Organisation, is funding a 
$650,000 project to help coun- 
tries improve their ability to pro- 
duce up to date statistics. 

Government officials are being 
trained to measure the output of 
subsistence farmers and compile 
basic data such as form size pro- 
files. A statistical complication is 
that very few frowns are en- 
gaged exclusively in farming. 
Most people in rural areas also 
eam raoniy in other ways. 

The lack of statistics extends 
to research. Papua New Guinea, 
for example, has around 1,200 
varieties of sweet potato - *we 
only have records for ten of 
them,” confessed a Ministry of 
Agriculture official*. 

One country has made impres- 
sive research in yams; "but noth- 
ing has been written down and 
nothing has got out to the farm- 
ers,' said an offidaL 

Although in normal times food 
supplies u most of the islands is 
plentiful and, except in barren 
atois, the need for increased out- 
put is not seen as a priority, 
there is concern among neutri- 
tionists about the consumption 
of imported canned food and the 
fatty nature of diets. Unicef is 
now engaged to encourage home 
gardens and more vegetables. 

In some parts of the region, 
however, demand for fatty foods 
is strong. In w estern Samoa, for 
example, cheap and forty meats 
such as mutton flaps and turkey 
tails are much in favour, and 
Australia and New Zealand are 
happy to export cuts their own 
populations no longer buy. 

with social esteem berna mea- 
sured by girth in many Pacific 
countries such meats are gobbled 
up with relish and only the mea- 
gre lean bits discarded are. 


Brazil begins coffee export auctions 


US markets 

We apologise to our readers for 
the of the o m ission of the New 
York and Chicago commodities 
tables from our early edition, yes- 
terday (Thursday). This was due 
to a computer fault. 


BY RUC TURNER M SAO MULO 

BRAZIL'S FIRST auction for the 
acquisiton of coffee for' export 
was held by the Sao Paido Cobh 
modity Exchange on November 4 
with some 50,000 bags (60 kgs 
each) being sold for prices which 
reached US$47 a hag in a very 
active session. 

Traders in Sao Paulo said these 
prices were not typical as they 
reflected demand from expo rte rs 
who were committed to sales pri- 


or to the signing of the recent 
agreement which reintroduced 
o o nx a xy- by- coim t r yqeotaa raider 
the International Coffee Agree- 
ment. This means that they are 
obliged to ho n o ur their -commit- 
ments even if they have to pay 
unduly high prices to obtain the 
coffee. Further evidence of this 
situation was the small number 
of buyers, indicating that only 
those that really had to pay the 


high prices stayed fn the market. 

The next auction is due to be 
held on November 9 and traders 
predict continued strong demand 
with the situation returning to 
'more normal price levels - con- 
sidered to be between $20 and 
$25 per at present. 

One auction is to be held by 
the Brazilian Coffee Instutute 
each week, with around 50.000 
ba& going an sale each time. 


i unices 

REUTERS (Baaic September IB 1831 » 100) 

Nov 4 Nov 3 month ago year ago 

16S10 1658.1 1659.1 160*3 

DOW JONES (Bbsk September 18 1931 - 100) 

Spot 125-95 125.67 127.25 120.88 

Futures 127.75 127.4 * 13239 12025 

LONDON MARKETS 

COCOA PRICES ft* further on the 
London Fox yesterday, with the March 
contract ckwng down £18 at £1,1 2050 a 
tonrw - its lowest level since January 5 
1983. Ther bearish fundamentals and 
charts, coupled with the strength of 
sterling against the doftar, again 
dominated the market, dealers said The 
market Is also heW down by panic seiflng 
by producers - Nigeria and Brazil 
aremaklng constant daDy sales, and 
other countries of origin may be forced 
to fallow them. Dealers believe the 
market is rapidly approaching the 
pshcotogjcai support level of £1,100 a 
tonne, and could fas further if that level 
Is breached. The projected market fan is 
likely to hinge on talcs by the 
Internationa] Cocoa Organisation later 
this month on the poss*te resumption of 
buffer stock operations. Coffee prices 
were also sharply down, following heavy 
commission fond seffing and the dollar's 
decline. However, there has been good 
recant demand from roasters, and 
sentiment in the market remains 
constructive. The market's volatility has 
attracted increased interest in traded 
options; the turnover of 110 lots 
yesterdayconsteted entirely of caA&On 
the London Metal Exchange aluminium 
prices again retreated, although they 
dosed well above the day's lows, in the 
bullion markets platinum and saver again 
fell steeply, showing their dependence 
on an industrial base which could be hit 
by economic recession, dealers said. 


qaMfneontea) 

Sprite 

ClOM 456Kr-45754r 

Opening 456*468* 

Morning ft* 459.70 

Afternoon flx 457.66 

OsykWgn 4SSfc-485K 

Pay-atow 454-458 

Gold A Hearten Oetoe 
Sprice 

US Engle 470-475 

Mapietoal 47CM75 

Krugerrand 4GB&-46B& 

1/2 Krug 242-251 

1/4 Krug 120-128 

Angel 458-471 

1/10 Angel 47-52 

New Soil 107W-108V4 

OtdSov. 107VM09 

Britannia 470475 

NoMeffet 492497 

S8wr (line ounce) 

UK pence 

Spot 356.16 

8 months 364.10 

6 month* 371.75 

12 months 38806 


Eequtvalani 

25735-25814 

283*426414 

280846 

258.5GB 


Eeq ufvei e n t 

2884881k 

285268V* 

26715-236)* 

135084003 

6853-7127 

261-66-6448 

20302920 

GOW-8114 

6015-61 V* 

265-268% 

27825-7548 


US eta equiv 


Crude oS (per berrel FOB November) + cr- 
DuM Sl6054M52y -*1)01 


W.TJ.fl pmedQ 


81805-802)144)01 
81700400 -001 
$1803408* -4L1Z 


Ofl products (NWE prompt detvery per tome CIF 
December) + or- 

PramtumGeeafeie 182-1 86 -1 

Gee OS 182-184 -00 

Heavy Fuel OR 9344 -1 

Naphtha 157-150 

FaMeunt Argot EMmetee 


Goto (par tray ez) UST -90S 

Sflver (par troy <s) . 366.150 -1800 

neQnum (per troy oa) 846400 -3800 

Wfadlum tper troy o«) 810400 -S78 

Ahmdnhjm (free merited $1830 -25 

Copper JUS Producer) 960Sc 4205 

Lead (US Producer) 4200c 

Nfc**J (tree market? 288c -1 

Tin (European tree market) £38870 >4700 

Tbi (Kuala Lumpur market) 1708r +000 

Tin (New York) 3250c -*2 

Zinc (Euro, ftnod. Price) $820 

Zinc (US Prime W e eW n) 43075c 


S e ri a l Ctoea Pravto u a Htgfr/Lowr 

Nov 10500 10405 10500 

Jan 10808 10705 10700 10800 

Mar 108.10 10305 10900 10900 

May 11175 11000 11005 110.75 

Sep 9800 90.10 90.10 0900 

Nov 10100 10100 10100 

Turnover Wheat334 (195), Seeley f27 (BSj). 
totsoflOOtotmaa. 


NTATOttlpome 


US MARKETS 


Ctoaa 

Pravtoua 

Hgtylow 

880 

8800 

830820 

1010 

10200 


900 

9100 


1487 

18200 

1620 1400 

1840 

16800 

18801890 


cants (h» wigK)t __ ... 

Sheep (dead wetghtft I9502p +17.19 

Pjgegvevieighor 76.18p +1JV 

London daky sugar {raw) $17800* -400 

London dsky sugar (white) S19O0QX -300 

Teftr and Lyle export price £20600 -300 

Barley (English feed) El 06.00 

Mebfl{US No. 3yai0W) £13200 -100 

vniew (US baric Northern) £9800 -4X75 


1tXM8p +2J7* 
19502p +17.19* 
78.18p +101- 


am»Wuei (99J5%) 
Strike price S tonne 

157S 

1800 

1625 

Copper (tesde A) 
SMce price 8 tonne 
1950 
2000 

2050 

Copper (Grade A) 
Strike price E tome 

1125 

1150 

1175 


Cake Puts 

Jen Mar Jan Mar 

87 741* 67 88 

75 64 70V4 100 
64 5416 93 115 

C— Puts 

Jen Mar Jan Mar 
13* 1821*70 1501* 

107 1121*93 179 
841* 9*1* 1191*2101* 

~ Cato Puts 

Jan Mar Jan Mar 
£6 41 


Turnover 568 (687) lots of 100 tonnee. 
«OYA»CAMMEAL E/tonne 

Close Previous Wgh/Low 

Dee 132.10 18000 

Feb 13200 13100 13000 

Apr 13200 13100 13000 

Jun 12300 12200 

AIM 12100 12100 

Oct 12300 12300 

Dee - 12500 12500 

TIstomt 20 (SR loti Ofioo tomea. 


I (9 per tonne) 


Rubber feporiV 
Rubber peq» 
Rubber (Jan|» 

Coconut o»(Pti9 
Palm Ok (Malaya 
Copra (PhSfapw 
Soyabeans (US) 
Cotton *A* Index 


S90Op -100 

820Op -100 

<B0Op -100 

S4670QK 
*34700 
S31O0OW 
*134.00 -4X00 

75000 44X40 


LOUDON MBTAL EXCHANGE 

Close Prevtous 

Aki mM iw. 987% parity tf per tonne) 

Cash 1660-68 1716-25 

3 months 15908 164981 

Al na it n inn090%peri»y(g per to nn e) 
Cash 834-6 978-8 

3 months 898-7 933-S 

Copper, tterie A (£ par terns) 

Cash 124060 1219-21 

3 months 1121-a 112360 

Copper, Standard (£ per tewnefr 

Cash 1205-15 11906 

Smonfta 1110-15 11153B 

SSverflISea m s/finBOunce) 

Cash 632-5 688-70 

3 months 643-6 6834 

Lead [E per tonne) 

Cate 358-9 35243 

3 month* 840-1 3360-7 

Ntticsl (£ par toms) 

Cast) 3200-10 3250-60 

3 months 318860 33400 

*23nc(£ par tonne) • 

Cate 461-2 *504 

3 months 452-3 461-2 


Hlflh/UW 


1630/1820 


(Prtoee supplied by Amajg a nia mi Metal Ttadtnfl) 
AMOtflcM Kaib dose Open tntoreat 

Ring tumpser Q tonne 

162040 

1580-60 unquoted 2049 tats 

Ring turnover 8SJ25 tonne 

925-8 

687-6 896-7 820941011 

” Rtog turnover 63050 tome 


1250/1220 

113/1115 


1122W-3U 

11105 


1190200 

111018 


5-7 82063 tots 

Btop turnover 100 tonne 

33 tote 

Ring ftsnawr 10000 ozs 


368-60 

344546 


4560/452 


455045 

45440 


6503 580 tots 

rang turnover 1Q02S tonne 

33040 12089 lots 

Wng lumpwr 1010 tonne 

318060 *032 lots 

rang turnover 7000 tnceie 

452-3 14009 lots 


WnettopB (64s Super) . 5lSp 

£ e tonne urtees othenriee stated, p-pmepffcg, 
o-certs/*». r-ringgit/fcg. v-Jan/Msr. w-Oct 
x-Nov/Dac.y-Dec. aUert/FCb. T Meet Commleelu 
average tatstoefc.* change from a we* ago. 

V London physical market 5 OF Rotterdam 

QABOB-l/taeie 

Close Predous HtgtyLow 

Nov 18100 16200 16200 180.75 

Dee 16200 18800 16300 16105 

Jan 16205 18300 16800 16100 

Feb 16000 16100 18105 18000 

Mar 15800 1S90O 1680018800 - 

Turnover 7149 (4780) lota tit 100 tonnes * 

FRBOHT FUTURES XflnOax point 

Ctaae Prevtaua Wgh/Xow 

Jen 1.M90 13400 

Apr 12860 12660 12800 12400 

J* 11425 11300 1278012690 

BR 11740 1171J 1142511300 

Turnover 223(1 say ‘ ' 

ORAkNta E/torme 

Wheet Opes Previous Hgr/Low 

NOV 11020 11000 11025 10920 

•lan 11206 11200 1127511200 

Mar 11445 11400 114.75 11445 

May 1)678 11600 11700 11675 

j*y 119.00 1192S 1192511000 

Sap 10270 1Q240 1027010270 

NOv 10446 10425 1044S 104.15 


HflMLow 
0 0 
17200 16400 
17200 16520 
1728016740 
17380 16880 
0 0 
0 0 

HWLovr 

1960019070 
2020019600 
20800 30300 
20900 20600 
30800 2 06 00 
30900 
19700 


Turnover Raw 3209 (2228) late of 60 tenon. 
WHto 1890 (1226) . 

Peris- Witte (FF?pwtonn*Dec 1113, Mar im 
May 1175, Aug 1200, Oct 121&Oae 1230. 


COCOA £/tormo 


The precious mettes again came under 
wtypresauriHMibadowtoOOTMTOsian 

the goW^ncPsIver, reports Draxsi 
Burnham Lambert races recovered 
sflghfly an trade buying and mixed 
shcxt-coveringfaAcwing penetration of 
support levels. Platinum was knit-down 
in all but the spot November position 
which dosed sharply lower rradnfy as a 
result of local spread activity. Copper 
continued to rafly on fend end overseas 
buying, the advance bafag fuoSad hy 
reports of a strike at a processing plant 
and fears of decMng stocks. In crude ol 
early trade and fond settng depressed 
prices before ahortcoverlng and trade 
buying pared tosses. A report that ths 
ICO was clarifying coffee quotes ted to 
commission house and trade buying fa 
ttw futures, touching off stqps before 
profit-taking pared gains. Aggressive 
trade buying finned sugar before 
origin-type seSng and profit-taking held 
the advance. Cocoa fai to new contract 
Iowa on commissfan house seffing before 
arbitrage buying and shortcovertog 
helped prices recover. Cotton figures 
were dominated by focal actfvtty. The 
trade was noted as s fight seflsr. The 
meats continued to recover on mixed 
short-covering, though once again 
volumes were fight ^ The grains were firm 
across the board, the refer being led by 
soyameal which roes on reports teat the 
Soviet Union wB buy 360000 tons of 
meal tor JanuanhJune 1988 defivery. 
Good commaroU buying was noted in 
the meal which also helped soyabeans 
firm on professional buying. Soya oQ 
futures rose aa the premium structure 
i mpro ved. Ant l ctp ef ed expansion of 
export bu si n ess helped metis raBy- 
Wheat, too, was firm, but was held bade 
by anfiefoeted US Government sales out 
erf its Inventory. 


COFm-cy370DOIbtoMotoite4 
Ctato Pravtom HWUwv 

Die 12500 123.66 1380012205' 

Mar 130.49 13823 13000 13775 

Mqr 13304 13077 133.75 12975 

Jly 13378 13170 133.75 13125 

Sip 13500 13304 13600 13300 

Dec 136.13 134.15 133.10 133.10 

Mb 13700 13123 13700 13700 

COPPER 25000 toKCBimytoi 

Cto— Pmvloui Hphfljon» 

Nov 9245 0175 O 0 

On 8900 8925 9100 88.15 

dan 8840 87.70 0 0 

Mar 8640 8400 85008300 

May 8300 8220 8240 8100 

-fly 8600 8020 8000 7900 

Sap 8000 7945 79007900 

Dae 7900 79.10 8040 7900 

Jan .7976 7905 0 0 

Mar 79.70 7900 79.10 79.10 

MLA7WUH SO fray or Sfooyoz. 

Ctoaa Praviom ragtyiow ~ 

55 4817 4932 4890 4680 

On 4730 4970 0 0 

Jan 4750 £000 47504780 

Apr 4840 5090 4840 4840 

Jly 4830 5180 4980 4830 

Oct 5020 6370 6020 6030 

Jan 5110 5380 0 0 

8M.VER 5000 tray ogowtafiroyog; 

Cktaa Prwtaua «flh/Low 


Chicago 


627.2 6880 

6300 8880 

6330 6734 

6430 6834 

9510 8930 

6890 7010 

666.1 7108 

882.1 7250 

6880 7300 


8260 6190 
8430 6340 
0 0 
6580 6400 
8680 8460 
6720 8600 
6830 6890 
6070 6897 
0 0 


«JOABWOia0^rifg0t»tt8;«tonto|9» 

Ctoaa Fmvloua Hgtytoiv 
Jan 700 600 0 o 

Alar 705 70* 707 741 

May 702 741 7.71 748 

Jly 707 748 7.75 703 

Oct 720 706 703 701 

Jan 708 7.78 0 0 

Mar 804 704 808 804 


New York 


QOLD 100 troy CB^yraym. 

ao*s Prerioua Htab/Um 



Ctoaa 

Pravtoua 

Mgh/Lt» 

NOV 

Dec 

4670 

461J 

4880 

48*2 

4670 4560 
4690 4590 

Deo 

Mar 

I 

Mir 

1088 

1121 

1143 

1184 

1184 

1208 

1334 

1108 

1139 

1182 

USB 

1205 

1228 

1253 

1098 10B4 

1130 1117 

1183 1140 

1172 1163 

T192 1182 
12181306 

1242 1233 

Jan 

Fab 

Apr 

Jun 

SS 

ORAM 

4690 

46*0 

4704 

4780 

4810 

481X0 

EJUC81 

4700 

474-1 

4800 

4880 

4920 

4800 

5000 to* 

4623 4880 
4870 4010 
4720 4670 
4790 4730 
4820 4800 
4810 4610 

csrts/tx 


COTKAi 50000; canf/toa 

Ctoaa PravtouB Hgh/tour 

Dae 6700 eras 8709M06~ 

Mar 6875 6809 0920 6700 

May 8940- 8900 69006840 

Jly 6906 0900 8900 6840 

Oct 6505 6640 66.706500 

Dae 6400 6400 64J75 6400 

Mr 6505 6645 68006600 

cmJOgCMHUghQ 42000 us gate S/bwral 


1102510900 
112J5 11200 
114JS 11445 
11700 11875 
11925 11900 
1087010220 
10445 104.15 


Supptos of Engtah dessert applea ramabi good 
and priew attbli with Coxs at 3860b a b, 
Spartan* and Rusams 40-45arapm FFVB. A 
temporary reduction In auppte* of BraiNoysdua 
to meant pewar cut* at paoktame Bted prion tt 
30-4Sp (previous amtfczs-aop). 


Tumovar 4447 (3897) tota of 10 tomaa 
KJCO Indicator Prices (SOR* par tome). DaBy 
price tor November 4: 1*3875 (143007) .10 day 
Mtoag* tor November 5e 146723 0 463.15) . 


FIHHT AND VEOETj 


C CTFBWtome 

Ctoaa Pnavious tflghftew' 

Nov" t55 1446 ~ 1238 1200 

Jan 1238 1277 1271 1290 

Mar 1200 1303 1295 12S6 

Mm 1291 1328 1322 1290 

Jty 1310 1346 1342 1308 

Sap 1336 1386 1380 1346 

Nov 1875 1400 0 0 

Tumwer. 5338(20*6) tola of 5 ttrtiaa 
ICO todfeanr prices (US cants pw po 
Nova rte sr 4. rComp. daly 11303 (11&28) 
awraga 11108 piiJRi 


Ctoaa Pravtaus Htgti/Lovr 

Nov 15805 16600 100015840 

Jan 15406 15006 15645 150te 

Mar 16205 14806 1540014900 

May 15100 14876 15306 19100 

Jty 151-25 14815 16200 14900 

Nov 14600 14606 0 0 

Jan 14620 14600 0 0 

Mar 14620 14500 0 0 

COCOA 10 tomtsfiponnaa 

Clow Rnwtoua Htgh/Low 

Dec 1812 1798 IBM 1784 

Mar 1638 1626 1643 1817 

May 1870 1857 1873 1661 

Jty 1900 1886 1900 1680 

Sap 1930 1916 1930 1930 

Dec 1987 1955 1973 1960 

MW 1999 1986 0 0 



Ctoaa 

Pravtoua 

»0»)/bOw 

Dec 

1804 

1909 

1806 1875 

Jan 

1500 

1806 

1804 1807 

Fab 

1801 

1808 

18081808 

Mar 

1677 

16-78 

t&80 1846 

Apr 

1870 

1874 

18701800 

May 

18.70 

18965 

18.70 1E4S 

Jui 

1806 

1808 

18001807 

Jty 

1800 

1805 

18061802 


1808 

1806 

1838 1806 

Sep 

1609 

1070 

18081808 


WBATWGQfc 42000 U8gNto.C4W*/US gate 

Ctoaa ftavtoua High/low 

5ac 5523 £500 5525 5400 

6501 55.15 6505 5440 

5446 5400 64455305 

Mw 5200 5220 522D520O 

** 6065 SOM 51006030 

May *9.75 4S4S 49254900 

•kal 4925 4905 <0254900 

Jy 4940 4900 48404925 

Aug 4900 4900 48004800 


SOYABEAN OIL 60000 fee; cmwa/te 

CkMa PravtoUa Htgtifljom 

Dec 1702 1728 1709 1729 

Jan 1708 1743 1774 1745 

Mar 1708 17.74 1806 17.78 

May 1620 1600 1825 1601 

Jty 18.42 1820 1800 18.12 

Aug 1800 1825 1800 1820 

Sap 1847 1827 1800 1B20 

OCt 1847 1820 1845 1800 


Dec 1875 1805 


16.75 1X75 


SOYABEAN MEAL 100 tone 3/ton 


Ctoaa 

Pravtoua 

Hlgh/Lm* 


1830 

1770 

18601790 


17B.7 

172.1 

1790 1730 

* 

171.7 

168.1 

17*0 1890 


1880 

1660 

17001060 


108.1 

.1630 

1890 1840 


165.0 

1630 

188 .01840 


1640 

1617 

167.0 1630 


1630 

1610 

16801630 


1640 

1620 

18701530 



WHEAT 5000 bq mta ccntsyeOb-baghal 
Ctoaa Pravtoua Kgh/Lovr 

, Dec 285/4 264/0 287/2 283/4 

Mar 298/4 297/0 300/0 297/0 

- May 298/0 296/8 209/4 297/0 


May 298/0 296/6 

Jty 293/4 28Zm 

S«P 287/4 288/0 

Dec 297/D 295/4 


299/4 297/0 
286/0 282/4 
289/0287/4 
0 0 


UVEH0a$31XlXMfta»nt»/li» " - 
Ctoaa Previous tegtyuwr 

Da° 42-70 42.17 42^5 41.60 ' 

Fab 42.15 41^ 4220 4000 

Apr 3947 38.72 3905 3847 

Jun 4207 4106 4205 4105 

Jty 4240 42.12 4207 4100 

Aug 4106 4005 4105 4005 

Oct 3900 38.60 3900 3800 

Dse 39.10 3806 3900 38.10 

M4 tTP. 8000 bu mlw; canta/SSb buarial 
Ctoaa Pravtom Hipn/Lo** 

^ *555 177/2 181/2 178/0 

^ 184/4 181/4 188/a 182/2 

May ire/o isg/4 rao/o ibt/o 

Jty 1 K/8 190/2 193/4 190/2 

S2 EXE 191/8 189/0 

Dae 190/2 189/0 191/2 188/4 

Mar 196/4 195/4 196/2 194/4 


:S P1 lir a 3 8, 0 00 tea; csnt*/to 
Ooaa Rravkwt HtftfUwr 
55 5*00 65005305 

5?^ 5500 53.15 

5500 56005445 

5505 6600 SB0S 5405 

ilWAi n 5 , 0 00 tw Bflu caoto/aob buteai' 
Ctoaa Pravtoua ragn/Uiw 

538/4 529/0 043/0531/0 

548/0 537/2 851/0 538/0 


Jty 656/2 647/0 861/0 5*8/4 

Aug 553/4 543/4 567/4 5*^0 

Ste 5*4/0 537/4 548/4541/0 

Nov 542/S 635/2 S47/2 537/0 

LJVE CATTLE 40000 tw;oenta/lb8 

caata Pravtouaragtyiaaf" 

Doe 6202 8202 ""820561.15 

F6b 6002 58.78 .8000 5800 

Apr 62-77 $208 6302 8100 

Jun 6277 0200 02006100 

£rg 810S 6000 610060.10 

Oct 60.10 6070 80355905 

Dae 6100 61.10 8100 8005 


A 


1 



V. f r . 

,k -~, V 
IT- 





Financial Times*Friday November 6 1987 

CURRENCIES, MONEY & CAPITAL MARKETS 


FOREIGN EXCHANGES 


No respite for US dollar 




h 




/• =) 




i-; i . ' 


THE DOLLAR fell .to a record 
low against most currencies yes- 
terday because most investors 
and speculators saw little chance 
of any agreement being reached 
on a reduction in the US budget 
deficit 

This was' the primary factor 
affecting sentiment in aaditon to 
comments made by Mr James 
Baker. US Treasury Secretary, 
that the US wanted to avoid a 
recession even at the risk of a 
lower dollar, and a cut in many 
European interest rates fin'll to 
have much effect The West Ger- 
man Bundesbank cut its Lom- 
bard rate to 4V4 p.c. from 5 pjc. 
and the French authorities in- 
creased their money market in- 
tervention rate to 8ft p.c. from 
714 p.c. These were seen primari- 
ly as an attempt to reduce a 
build up of speculative p le asu r e 
with in the European Monetary 
System, following a sharp rise in 
the D-Mark and a sudden declin e 
in the value of the French franc. 
The Swiss central bank «iw> ^i t 
its discount raze to S pc from 
3 Vi p-c. 

Despite this and intervention 
by the Bundesbank at the fixing 
in Frankfurt, in support of the 
dollar, the US unit continued to 
lose ground. Only a cut in the 
budget deficit significantly 
above the $23bn G ramm Bud- 
man amendment was likely to 
pull the drains round, according 
to most dealers. ^ 

The dollar fell to a record dos- 
ing low of DM1.6680 from 
DM1.7120 and Y134.60 from 
Y 137. 15, also a record closing 
low. Elsewhere it finished at a 
record SFr 1.3880 from SFrL4120 
and FFr5.6400 compared with 
FFrS-8250- On Bank of-Eng)and 


figures, the dollar’s exch 
rate index fell from 97.8 to 9 

STERLING-Txmdfng range 
against the dollar in 1987 Is 
1.7855 to 1.4710. October 
average 1.6620. Exchange 
rate Index 756 from 7M at 
the opening and 78.0 on 
Wednesday. The six months 
ago figure was 736. 

Sterling finished below its best 
level but was still up from 
Wednesday's levels. It lost 
ground against most European 
currencies but rose sharply 
against the US dollar to $1-7855 
from $1.7475, its highest level 
since June 1982. Against the 15- 
Mark it fell to DM26775 from 
DM2.9925 but rose to Y240J25 
from Y239.75. Elsewhere it 
slipped to SFr2.4425 from 
SFrz.4675 and FFr10.07 com- 
pared with FFr10.18. 

D-MARK- Trad lug range 
against the dollar in 1987 Is 
1.9805 to 1.6680. October 
average T6011. Exchange 
rate index 1506 against 14^4 
six months ago. 

The Bundesbank’s dedson to 
cut its Lombard rate to 4*4 pc. 
from 5 p.c. appeared to have lit- 
tle effect even though it was 
claimed to be part of a coordi- 
nated action which included a 
rise in the French money market 


intervention rate to 8*4 ac. from 
7fep.c. 

The dollar was fixed at its low- 
est fixing level ever at DM1.6950, 
down from DM1.7090 on 
Wednesday despite intervention 
at the fixing by the Bundesbank 
of $100.6m. 

JAPANESE YEN -Trading 
range against the dollar in 
1987.1s 15965 to 13460. Octo- 
ber average 14867 
jntto index 2286 against 
six months ago. 

Further funds were switched 
out of the dollar in Tokyo as 
both Investor confidence and the 
US unit hit record lows. Fading 
hopes of any real progress in cut- 
ting the budget deficit meant 
that most people now expected 
the dollar to move lower. 

The Bank of Japan was busy 
giving support estimated at 
Slfebn which may have helped 
to plaster over some of the more 
savage attacks but the dollar still 
finished at a post war low of 
Y13565 after touching a low of 
Y135.35. This was well down 
from the close of Y13&65 in New 
York and Y13725 in Tokyo on 
Wednesday. 

In Lagoa the Nigerian naira 
eased against the dollar at the 
auction with the US unit im- 
proving to 42998 


EMS EUROPEAN CURRENCY UNIT RATES 



Era 

central 

rates 

Currency 

•%sjh 

crate 

rate 

% dime 

OiratwK* 

tak% 

Bdpln Fmc 
Dnddw 

Ceram D-Mark 

DotriiGufldtr 

IrtUFnK 

Hatai Urn 

424582 

705212 

205853 

690403 

231943 

076801 

148558 

432432 

7.96954 

206054 

7023Z3 

231843 

0775856 

152901 

•6161 

4-149 

+010 

*173 

-004 

♦097 

♦271 

♦081 

♦069 

-0.70 

+093 

-084 

+017 

♦211 

*15344 

4L6404 

±10961 

*13674 

*15012 

*16684 

*40752 


£ IN NEW YORK 


16*5 

- era 

finta 

era 

r Spot 






r^rJLa 


ImUJ 


- , — t to Em Hunto ne rtUe e dm 
A^OMOkaUcd^FtaKUTIVM. 

POUND SPOT- FORWARD AGAINST THE POUND 


STERLING INDEX I 


1 

"=r 


830 

m 

754 


900 

10.00 

IK 

753 

751 
.. 751 
• 7U 

275. 

751 

751 

74.9 

750 

u 

pm 

l» 

H 


No«5 

» 

era 

OKDMte 

% 

9*. 

0JK 

96 

M. 

IK 


L7S50-L7860 

23695-23705 

A«J119Ma 

225 


256 

Carat 

23)40-33701 

IJOdH-OHcpin 



Weftirtaft. 
Belgkm 

betete 

KrSsn 

Spten 

24L75-24401 

199.95-20130 

uj^irtra 

i imi 1710 

297V2.98J, 
242 s&aass 
muumK 

«20taS 

-023 

302 

235 

-093 

554 

■3M 

-9JM 

272-4150) 


030 

275 

L92 

-157 

Qffl 

487 

-690 

-605 

Jgfc: 

France 

Swrdra 

awvteTv 

112611471, 

1004-1019 

1074^-1003 

2208-2209 
1146V -H-471, 
1006^-100^4 
1002-1053 

243V24A 

7-10ftmfa 

-462 

-4.97 

-037 

-035 

4.99 

300 

614 

16-23dh 

isv^ra 


43 

-509 

-012 

-079 

437 

306 

512 

Aflrtrta — 

Srantad. 

SSiaS 

243C(-2t6 


*^5 



)ort auctis 



„^£S r 7t£Sr&.' 

1975-1D0J. 

OTHER CURRENCIES 



EXCHANGE CROSS RATES 




hm5 

mm 

a 

a 

a 


Ed 

EBI 

Ed 

El 


8 

$ 

H 

1786 

2 

2978 

1668 

2*03 

3346 

□ 

E3 

FI 


m 

050 

3444 

DM 

YES 

0536 

4062 

in 

L 

1239 

m 

m 

JjgJj 

m 

7417 

9193. 

07% 

9065 

MW 

2560 

Fft. 

SFr. 

0993 

040) 

1773 

0731 

2957 

1219 

2386 

9836 

0L 

4323 

m 

m 

m 


6107 

2508 

HR 

Ura 

m 

m 

□ 

7156 

1080 

Ri,,J 

0727 

U06 

3520 

(870 

1000L 

0706 

3073 

m 

SL 

0422 

L626 

ID 

1256 

40a 

1BL4 

3907 

4249 

1637 

un 

6972 

1417 

5059 

93L9 

383L 

L 

3054 



Y«a per 1,000: Rtnc* Fr.pir IQ: Lira per 1^)00: 1 


l period 


FINANCIAL FUTURES 


Gilts trimmed by profit taking 


Interest rate futures rose on the 
London International Financial 
Futures Rwfiang* yesterday, as 
moves in international interest 
rates and the sharp fluctuation 
in currencies were at the centre 
of attention. 

The strength of the pound, 
weakness of the dollar, rise in 
Japanese bonds, and Wednes- 
day's Mansion House speech by 
the Chancellor, as well as expec- 
tations of lower West German In- 
terest rates, led to a firm start in 
long term gflt futures on Iiffc. 

December delivery opened a 
full point higher at 12&12, and 
rose to a peak of 124-01 as the 
West German Bundesbank cut its 


Price DtC 

106 1726 17.20 

108 IS 76 

110 1126 

112 1106 

114 9.26 

116 708 

118 }w 

ud aw 


uwTLMBGttjnrreKsaraaits 


7423 

23 

9 49 




n on an* 
Bftl (US 
Hflft 0J0 
0D0 flTft 

000 031 

nm a*? 
QXH 1-14, 
02 157 


Lombard rate by & P-C. to 4% 
p.c. The cut in the Swiss dia- 
countrate and speculation about 
another reduction In UK bank 
base rates added to the general 
mood of euphoria. 

Dealers raid underlying senti- 
ment was extremely nervous, 
watching the loss of confidence 
in the dollar on the foreign ex- 
changes. This encouraged profit 
taking, bringing the December 

gilt contract back to dose little 

changed from Its opening lewd. 

at 128-13, compared with 123-12 

cm Wednesday. 

US Treasury bond fu t u re s for 
December delivery also opened 
higher, at 89-02, as fasts about 

IMI ~ 


demand at last night’s US Trea- 
sury 36-year-bond auction eased. 
Wednesday's 10-year note sale 
was regarded as disappointing, 
but confidence was ht yw tf d by 
news that the Treasury would 
offer only S4.75hn of 30-year 
bonds, which was about half the 
amount expected. 

. In spite of tiie acute weakness 
of the dollar Wall Street rallied 
in early trading, and sentiment 
in the bond market was under- 
pinned by the cut of Vt p,c. to 8% 
p.c. in US banka prime rates. 

December bonds rose to a 

of 90-15 on Iiffe. before closing 
at 89-31, against the previous set- 
tlement of 88-28. 



aw*— catena. Praa ms Em — a — 

tert— In; Cteh 40359 Pm 30009 — Oftte 


19*2 1902 OQO 002 

37*2 1705 <L00 005 

15,62 15.09 (LOO 009 

1«/J 1«1J. 000 Pit 

ll o 1109 OOO 029 

9JO M7 Ofll 047 

B.01 non nn* LOB 

U7 U3 U) U3 

BOM, Cate m Pm 3 

oqrs— i«: oraaus pwaoer 


LvrerT-axiMWBocRmtatsDPnsu 

SUM Cra-Lm PuUhLMt 

Plte Hm Oac NovDfC 
17000 109 7m 1LS9 1441 

17250 2.45 US 13.45 1719 

17500 1.91 5.45 1541 18.95 

17750 248 4,78 17.48 2178 

18000 U3 418 1963 r?ui 

18250 085 3 JA ZL85 2464 

18500 044 3.16 24.14 2646 

18790 047 274 26.47 2874 

ad « ra -. mat eras Pm 5 

fte^iapabK Cate 73 Pm 177 


UFPEB/S OPHORS 

■■PUra mU 


tx> 


Pika No* tec ten Mar a** Dec tea 

L50 27.00 Z70O 2700 (LOO ft 00 

1 44 wm -ncr, waa -nm gwg nm 

L60 i7j)o i7m 17.00 i7m -- 


1 K BM waa 17 00 IBM 


non 

aoo 

n fti 


(LOS 
„ 017 

om 0l2 049 

DID 0.46 118 

056 134 245 


110 7.00 715 — - __ 

175 240 155 430 515 0.49 1.96 3038 4.45 

UD (226 135 227 334 335 06 585 704 


Ptntadv'topcaiM: 


MW, era 226 Pm 7 
*2 Cate 329 Pm 1381 


Mriol 

LO — 1290 — ~ 270 ~ — 

1 4ft 2048 - — . 2060 0J0 030 030 

L55 21.75 2US ZL75 OJO 030 030 

UO 1675 1615 3679 16.75 UO OJO OJO (LSD 

165 1U5 1175 run 1230 OJO 050 085 155 

170 640 640 7.70 855 030 IDS 175 235 

175 245 370 450 560 115 270 355 5.90 

niMaiil ii— ins rsii nr* n*r ten 

p — Tm v*i— a M era 901 Pm 173 


ptmAKLPaiA sc as mam 

8125M (cote avtlj 


ill 380% 


tear rnm Oac tea tear 

i wn J2JQ 1 1Q4 11 aft JL70 0 1030 050 71 >4 

1675 700 150 915 9.75 005 1050 090 195 

1700 020 050 730 005 010 1070 . 150 250 

1725 410 4.70 OM 020 040 130 220 3.40 

1750 210 120 410 505 OSD 215 325 UO 

1775 035 205 123 355 205 345 055 585 

1800 OJ3UO24O3AO9SSS1O6J0 7J5 
Eat—da— mm. CtebWA Pm WA 
Pn— dW»«vteIS craw* PmN/A 


■475 294 


9075 144 

9L0D 170 


Iter 

202 

tee 

250 

IS 

Ok 

OOO 

tear 

am 

ten 

012 

0J& 

257 

227 

209 

000 

om 

014 

on 

234 

206 

109 

OOO 

am 

(US 

036 

210 

104 

L70 

ftftft 

006 

021 

042 

is 

164 

151 

nm 

009 

006 

048 

145 

104 

am 

on 

032 

056 

144 

106 

107 

0(0 

015 

038 

064 


LONDON 


CHICAGO 


20- YM 1ZX HOnteUU. «LT 


«CSf)S% 


123-13 

3234)9 


2»SS 32346 mu DM 
- 12249 Mar 


90?S 8817 

S949 89-14 87-20 


£ YEN (tM() 

ntArnSrm nm 


rm— it Va— 46773(460 44) 

p—b dw, — w- as»9 oaasn 


Btl n BlBi 


TE8M MPAJIEK BW1 1 . 

a 


Ok 


dm HJ* Low Pn*. 
10710 10710 10065 UK69 
10660 10660 10660 10519 

_ Vo— 843052) 
iV» — M. 49* (493) 


87-25 87-29 Bb-08 

87-05 86-25 86-30 

8647 lb-17 06-13 

0 O 0 

ooo 
o a o 

ooo 
0 0 0 


■9-07 Dtc 
88-09 Mar 
87-16 tea 

■6-25 Sap 


0.7376 OL^Ss" 0L73S1 0.733 
07343 07490 074X0 07390 

0 0 0 0.7452 

0 0 0 01514 

0 0 0 07516 


85-16 

8503 

B4-2D 


Lnv “ Rk 


8505 


HI 

Sta 


™gg35=5- 


sSwr* 

os — mg 

05919 05932 

03971 0L9K3 05950 05994 
sum aHm 03C30 D39B6 
0 0 0 06040 

BOO OMH 


THREE mm STEXJflfi 


Dk 

Cte 

*134 

•sa 

Lae 

9152 

Bn. 

1127 

Mar 

9U9 

9151 

9157 

9L32 

ten 

9153 

9140 

9L2S 

9159 

Sen 

9117 

9103 

9121 

9110 

OK 

93-15 

- 

* 

BUB 


Dk 

era 

9408 

985 

late 

9428 

hw. 

9418 

Iter 

9306 

9290 

9300 

9303 

Jm 

9343 

9344 

9338 

9319 

Sep 

9315 

9300 

9315 

9208 

DK 

9275 

9275 

9275 

9262 

tear 

9255 

9255 

0 

9246 


StafdhdiMXraX 


135 28031 40) 

PltOw !*/*( Iff ML 2(H22 09473) 


ff£3t 


Ckaa Htah La* Pm. 
OK 9269 92TO 9266 9230 

Mar 9253 9258 9249 9229 

Mi 9213 9215 92JO 4Ltt 

SS S3 33 SS 

Mar 0 9226 9L21 9L04 

tea 9104 91 . 07 91.02 9CLB6 

Sep 9089 9088 9083 9070 


Ok 


i*?^n l6l8S 15630 16005 


low tea fa '. 


OK ' " 07206 0J7Z& 1TW 07145 

07277 07286 07255 (L7ZL4 
07340 07340 0.7330 0.7294 
07400 - 07400 07400- 07370 


ok 


251% 24775 2MJ5 
25250 25250 25000 251.50 


36600 


36455 


.90 25780 



CANT MAKE HEAD OR TAIL 
OF THE MARKETS? 



FIRST FUTURES 

WE CAN SHCWYOU HOW SUBSTANTIAL PROFITS CAN BE 
MADE FROM FALLING AS WELL AS RISING MARKETS 
CALL NOW OR FILL IN THE COUPON BELOW FOR INFORMATION 

01-925-0033 

rpteose forward your free information on FUTURES & OPTIONS'] 

I NameMrtMrs/Ms I 

I Addness___ 


i 


Telephone: Office. 


.Home. 


I 

* 


Fax No. 


HP 1 26 Jermyn St, London SW1Y4UG . 

‘ FI RST F UTU RES ISmtecnAaodatkinof , 

1 BROKERS LIMITED futuwtBrofcWOnaten { 

FUTURES TRADING SHOULD ONLY BE CONS® EREDWTTH RISK CAPITAL. 


REGIONAL DEVELOPMENT 

The Financial Times proposes to 
publish a Survey on the above on 

MONDAY JANUARY 28 1988 

For a full editorial synopsis and details 
of available advertisement positions, 
please contact: 

BRETT TRAfTORD 
on 01-248 5116 

or write to him at: 

Bracken House, 10 Cannon Street 
London, EC4P 4BY 
Tetec 8954871 

FINANCIAL TIMES 

EUROPE'S BUSINESS NEWSPAPER 


LG. INDEX LTD, 9-11 GROSVENOR GARDENS, LONDON SW1W OBD 

|Tefe 01-828 7233/5699 Reuter* Code: (GIN. IG10 


FT 30 FTSE 100 1 WALL STREET 

Nov. 3272/1287 +12 Non 1620/1635 +2 Nov. 1955/1975 +22 

Doc. 1272/1287 +8 I Dec. 1620/1635 -3 I Do& 19550975 +17 

. . . DoflGnc boon from Sam to 9pm. Prices taken at 5 pm. - - 


Petra* dnrsopH IK. 9318 (STB 


Dk 

Cte 

9209 

9& 

La* 

9205 

Prar. 

9251 

Ma- 

9234 

9257 

9246 

9231 

te* 

• 9213 

9215 

9205 

9107 

Sep 

9171 

9178 

9171 

9131 

Dec 

9L5I 

9151 

9L46 

9107 

tear 

9132 

9105 

9L22 

9001 

ten 

9116 



9092 


U2380EQU 

Pisalra dot’s am W- 37326 06598) 


Ok 


89-31 

IHO 


9® 


- 87-29 


1I72«9SM) 

Pmtais dor’s «pn Ml 10541 02426) 


CURRENCY FUTURES 


3.7^ 

1-Mu, 

5906 

6*d6 

ora. 

17822 

17786 

17732 

17660 

III 1^^— 

DK 

Lteea 

17580 


PH 


Ur 





Jn 


17555 

17500 

17370 

lUi.lirnM- 1 ’ 

MSpnrC 



L7t» 3.wSS 17386 17443 
3.7610 17339 17320 1-7400 
1.7560 - - 17340 


Prsra* (kite apcalM. 164 Q623 


MONEY MARKETS 

More rate cuts 


FT LONDON INTERBANK FIXING 


. >r 




Interest rates moved nervously 
in major fi n an c ial markets yes- 
terday; as dealers reacted to the 
outcome of the West German 
Bundesbank’s council meeting, 
and a further cut in US banka 
primelending rates. 

The German central bank act- 
ed in conjuction with the Bank 
of Ifrsnce, sa Gentian rates were 
cut and French rates increased, 
in a move to bring stability .to 
the European Monetary System. 

UK clearing bank bora 
1 8 per cent 

. 






In London 
bank fell to 

9%-9 p.c. as 

ling and the 
larledto 
cut in UK 
The Bazik 
forecast a 

age of & 



inter- 
c. from 
, of ster- 
of the dot- 
of another 
bare rates, 
gland initially 
market short- 

, revised this to 

at noon, and to S850m in 

the afternoon. Total help of 
S967in was provided. . .. 

Before lunch the. authorities 
bought &132m bills, by way of 
bank Mil* in band 1 at 8% 

and £44m bank biUs in band 
2 at 8% p-c. i: - - 

In the afternoon the Bank of 
Enjtiand bought another £7D0nt 
bilET throiKn £Slm Treasury 
bills in band 1 « 8* ptc.^S422m 
bank bills ih band 1 at 8% P-C£ 
and £247m/bank bills in band 2 
at 8% p.cLLate assistance of 
around aUpm was also provided. 


Bills maturing in official 
hands, repayment of late assis- 
tance and a take-up of Treasury 
bills drained £571m, with Exche- 
quer transactions absorbing 
SlQm: a rise in. the note circula- 
tion 555m; and bank balances 
below target &65m. ■ 

In New York banks cut their 
prime rates to 8% pji from 9 p.c. 

In Frankfurt the Bundesbank 
coundl decided to cut the Lom- 
bard emergency financing rate to 
4.50 p-c. from 5 p.c^ while leav- 
ing the dfaoount rate at 2 pic 
The German authorities added 
that the nest rate that liquidity 
would be offered to the banking 
system, through a securities re- 
purchase agreement tender, 
would be 3-50 j>.c. 

In Paris the Bazik of France 

rated its money market inter- 

vention rate to W4 pit from 7% 
p-o, -and its seven-day repur? 
chase rate to 8% p.c. from 8 p.c. 

In Zurich the Swiss .National 
Bank cut its discount rate by % 

p. C. tO 3 p.C. and it8 T^imhard 
rate by Vi p.c. to 4^ p.c. from 
today. The four major Swiss 
commercial i«niH> had earlier re- 
duced their customer time depos- 
it rates by % p.c. to 3 ac. .. 

In Amsterdam , the Dutch Cen- 
tral Bank decided not to 
its leading interest rates, in : _ 
of the Bundesbank move and the 

strength of the guilder In the 

EMS. The d ir ectors of the central 

bank met, but saw no reason to 

follow the Bundesbank cut. The 
Dutch discount has already been 

cut by Upx; this week. ' 




1HBC 

1 

HbUJHI 



■■lubI 


Tteteten— ratenteMUc wKK ra te ted tetet— t ra ihlii raaftetMdKda B atditegl 

Slop and hf ra — ra i teSKI — K K 8KteKXLOO«JB.Kdii»BraMdte.'T>r>ra»— HMIte 

wwfag s^araMTwiiiteBra a M Me te e adteMitepraSfaSiteBrara'fate. 
MONEY RATES 


NEW YORK 

(LmWim) 


Treasny BSlsaad Bonds 



. Rm5 

OiuteMt 

Ok 

Mate* 

EE9 

tara 

ta 

MtewSta 


365-375 


390400 

805 

298-400 

29D-U0 

430 

‘ ' ^1— || hi 

SSf 

80625 

2S0 

130 


425 

■ 


40125 

m 




JM— | 

340625 

>AK 

304375 

oofe 

Z2m 

675 


■ V ’rW 

m 

« 

Uttra 

. 


m 



tS 

8515 

9125 

90S 

950 

- 

_ 



LONDON MONET RATES 



925 

aoo 

*U25 

9LOO 

9L373 


9J25 

8J75 

9no 

9to 

MRS 

8.75 

10625 

MO 

175 

MIX 

94375 

6.40445 


ll m 


U75 

an 

83125 

94375 

8625 

8.9375 

8875 

8J625 

BJ625 

9J875 

720-703 

62S 

7025 


ass 

us 

aw 

w 

ass 


720-TJ5 

6H2S 

73 


aoo 

aw 

aw 

aas 

U75 

900 

ass 


72D-7J5 

a50 

725 


n«*7 «* fa»; ■■ ■ ■ ft aerate r *aa; a ra aat (am-. f n m /mtj * 
bkc ( ftw imra 8^ pv cm; Timpj Btec Ms ira or ftpara 9LS58 px- ECGO Hndtett 
Mta Bqnft Hwc. lira ap ra ftxter 30 JLw. ioraniB I* paftd ItoiMr 25 a ftnater , 
IfSfWwtfc UM ol. Seim I & fc 1L» At RShkk nlc hr 90 W OMter 1 ts Odtev 
Sgtj ftKMWiMJWfe I Ii il MtertT/ted Hra HjMB_nn tyT***. Mtet*— 
fSbkHmwBB* KTO 305 fnw wBw l.i y. B»»fc Pgtsfi fcatt to — u\ 

3-3l5 m act CertiKans id Tb Dkm ( t (Series 6); Oeptek 
gwcra4tett mtma a ■ per am; dro-dx aaftt - gt rtwd;,^ 

- pwa«; U a*rnsa,m- ^ ■#*. ha as**r S5, Dufrttsl 




$ WORLD VALUE OF THE DOLLAR R) 

~ BANK OF AMERICA GLOBAL TRADING ECONOMICS DEPT. LON DON ^#.1 


The table 



Bank of America Global TracBna London. 

New York, Tokyo, San Francisco, Los Angete^ Toronto. 

24-hours a dor tracing capability. 

Enquiries: 01-434 4360/5. Dealing: 01-236 9861. 


are IwBcativc. They are not based on, and are not 
of America NT & SA oar the FfrencU Than 

ECUk$USL 20564 SDR1»$US1JL33542 
As of November 4, at 11.00 a.m. 

_ __ 3 monte 6 monte 

Eurodollar Libor: 71 71 

Slbon 7% 71 


couawnr 


CURREMCV 


VALOe OF 
DOLLAR 


5060 

5JB13 

467 





CapBVI 

btf's* 

CoLPko (a) 
tFJL Ffw 
CFJLRbk 



asr M -:— 


putted bhate. 
F«e irate — 
ni irate — 
Flora. 

Fnra gyjd Aftta 


Fafttate C 

BT 

AFX Ffjpc 
UkIFihb 



COUNTW 


CURkOKY 


VALUE OF 
DOLLAR 



U) 

2.70 

5L8245 

LOO 

r LOO Co) 
1267 0U> 
134000 
130000 
Wino 
flOOQ 

taooo 

SJOO 
ZJX Co) 
78093 
45.99 

3756 

1300 

164600 

MJ17 (a) 

03109 

1H* 

LSA6 

126400 

291225 

551to) 

136.92 

0346 

10000(5) 

169669 

L4771 

094 

800-50 

02764 

5500 

55000 

10873 

LDO 

02873 

L409R 

3527 

80436 

1302.49 

13860 

21777 

2519 

KUO 

291225 


7400 
19 (K 
/165OD0U) 
1164700 Ce) 
50245 
50245 
3J555 
270 


NIvr.RraUc. 


CFAFira 

NUn 


L9B73 

10771 

2100 

L922 

179 

Ujg 

,90000 
1 7000 (a) 
*219000 Id) 

29L225 

42989 

645BS 


OmSdtMKisf. 


RW 


cowmrr 


cvmeRcv 


VALUE OF 


Frau*. 


rafate. 


ran 


Poind 


sssr 

WteBw 

Ztaqte) 


PMfttRko. 


hftdBte. 


st oumira - 

&Hdn 


U0.S 

nm 

French Fmc 
Lute) 

Fmc 

EbriraS 


St Ladi _ 
ScPtenv. 


Smo»(WeB»tn)j 
s«no»(Am)mm 

SnToM& PrincftDR 

S 




M.t*«rara6 W rarat au. *us docm m Nrara.cmaqF ra. u> parae i m*. fa JMomra. race- a> 
^AtfcWBiflhB teteJBL Aarafarapaft ra <P Friora Kft. 


NomsvM rara.to fvrans (nriu me. ( 




. O) Aqndlite » Od 87; AKMl dwara IV 108)6 (UK ram- 


“ toraltat ttafcn mill w oa 


tra hanrasiki 


Erf temria 




















































































WORLD MARKETS 


Financial ThnesFridivNowsmbor6 <987 


FT UNIT TRUST INFORMATION SERVICE 


FT-ACTUARIES WORLD INDICES 


•faintly compiled by the Financial Times, Gobfaw* Sachs &C^andWoodR^^^e * to- 
Ltd, in conjunction wiffa the Institute of Actuaries and the Faculty of Actuaries 


NATIONAL AND 
hesomal markets 


WEDNESDAY NOVEMBER 4 1987 


m 


Day's 

Pound 

Change , 

Sterling 

% i 

Index 


8L85 

7917 


TUESDAY NOVEMBER 3 19B7 


Pound Local 

Ooflar I SterHng Cuntney 

Index Index Index 


1907 1987 

High Low 


(appro) 


-23 

■MLO 

-Z4 

7&41 | -3S 

79.97 I —42 

-6.9 

7784 1 -UO 

136.79 I -U 

-35 
-4.9 
-33 
58 -53 

.92 -53 

.47 -3.0 

.66 -6.9 

.78 -23 

.71 -5.4 

-3.4 
-25 
-0.7 








u3E3E3Ea 


P y«y iptncsc Dfc 3L 1986 ■ 100 

Copyright, Tbe Haandal Tlnw% GoW«r\ Sachs & Co, Wood Mackenzie & Co. LuU967 
Hew Y«t iwkrt ctaed at 1430 tars tool thue. 

Latest price «— Mte terrtbtftioa. 


EUROPEAN OPTIONS EXCHANGE 


1QL43 


2.49 11353 




96.72 


104.76 139.73 10080 








BASE LENDING RATES 






SILVER C 
SILVER P 


EWI 



75 

ZOO 

79 

85 

L70 

47 

275 

141 

3M 

6506 

94 

88 

109 

10 

5 

37 

15 

3 

34 

45 




MnlCaafaiy__ 9fc 

UHAatBkU Vz 

JtBcdtWarAtB 9 

UtdlrtdiBKk 9 

tamaiEniMt — 9 

taiU 9 

RtnyMtefcr 9fc 

ANZBaririqGrap 9 

AndMBbpCMp U 

Mte4AColM 9 

BaxatfeBHao— _ 9 

UimORO 9 

Bok Creflt & Com 

BadcofCfini 9* 

Baric of Mod 


CfibatM 9 

Ctirlkntma8*k — 

DjriHdde Baric 9 

Can.BLN.EBt 

CHBGMedCitd 9 

CbspeotbeBa* * 9 

CpaftpArBI 9 

DmUorie f 

EqutVl TriFppfc Vi 

Tract Ud Vt 

FtatiriAGaStc 9>» 

FUU.Fh.CBv_ MPj 

uu.ss.uc Vh 

> Rabat Hriqt Co — 9 
BctetFaser&Rn — M 


MnMU 9 

NnaACaLTnat— _ 9 

MFta.lriltmo_ 9t 

ftnteUTMU l&i 

ILJWWASk 9 

Ma*tftW C __ II h 

m nMktm 9 

RqriTnolMc 9 

UMbBb 9 

SaMChM 9 

Ten 9 

UOmatpvCv mi 

Mari Heel KnaR 9 

Dated Hariifia* 9 

OriOTuPLC 9 




"iff SSSS&B 


MM^njnfna 












mnM . ru— Tit 


T'i 


3X- 




lg$l 5? B.*A. 1W« 

•at 




h» 




50 3-15 

34 aw 

40 520 


239 350 
189 15 


074 Z2D 
285 450 

62 
646 
1047 
<1 
104 
76 


145' 
17 
107 
- 633 
JB 

FUlfl 1 62 

RJO | 62 

136 


24X3 



48 

49 
201 

25 I 25 


36 460 

55 6508 

2 3-20 

31 350 

"l 550B 

3 2350 


51 IB 

20 450 

11 5 



1 


lBM9rW^U 


BOOB 

kCMMK 




raw 


PUZZLE No. 6,475 


Grindlays Bankp.I.c. 

Interest Rates 


Grindlays Bankp.I.c. 
announces that 
its base rate for lending 
will change from 
9V2% to 9% with effect 
from 5th November 1987 


Grindlays Bankp.I.c. 

Member ANZ Group 

Head Office: Grindlays Bank pic, 

Minerva House. Montague Close, London SE1 SDH. 



ACROSS 

1 Which provides improve- 
ment in capital growth? (12) 

10 Thankless person with sickly 
grin scoffed (7) 

11 Balance free but reduced by 
a quarter (7) 

12 Leader will be caught if he 
moves (5) 

12 Incorrect demand includes 
50% duty as supplement (8) 

15 Fruit in truck began to go 
bad (10) 

IS Bottle opener taken fay water 
lover (4) 

18 Spacious and on first-class 
lines (4) 

20 One’s (favourite act is to 
distribute underwear! 00) 

22 Former Italian banker confi- 
dent of public appearance 
( 8 ) 

24 Language of love in one lack- 
ing brilliance (5) 

20 Angry drunk to appear for 
trial first (D 

27 Russian beheaded for the 
Spanish (7) 

£8 Diva embraces unhappy 
agent upset by loss (12) 

DOWN 

2 Bank man's hobby? (7) 

3 No fraud misleads an old 
copper with this licence (44) 

4 Regretted sounding discour- 
teous (4) 

5 Ray is told I ordered unity of 
interest (10) 


6 Inspire bum to turn in, in, 
other words (5) 

7 Spanish nobleman points 
beneath piano (7) 

8 Claim one uses round about' 
50, mixed (13) 

9 Unit remembers to arrange 
repayment (13) 

14 Kept getting famous (10) 

17 Chance of stress Fd accepted 

( 8 ) 

19 Supposed to be placed in a 
pipe (7) . 

21 Tolerating noise in a large 
container (7) 

23 Mum is up around Gateshead 
looking for pines (5) 

25 Where something's inclined 
to be a tourist attraction (4) 

Solution to Pazxle No. 6*474 


aiiamsa □□utntna 
.□an a a id 
□□□ acDEia HBoanata 

□ a 3 a ^ 0 a 

aanaanaostn nana 

3 0 3 n a 

naann aanaaEaa 

□ a a n a 
□asnaoaa aaasa 

□ a 3 h ra r 
□aaa Haauinauaau 

s a a 0 so El™ 
□□aaoau 0033330 
a a n SJtL®. 
raaaaran aanama 


GRANVILLE 


SPONSORED SECURITIES 


HW Low 
206 139 
206 1*5 
41 32 

142 55 

188 108 
106 93 

281 230 
147 99 

171 236 
304 91 

ISO 87 
MS 219 
102 59 

700 320 
73 35 

114 83 

91 60 

124 42 

224 241 
54 32 

131 66 

264 115 
201 190 
175 96 

Securities 
regulation 
ndiject to 


Acs. Brit. Hid. GMknary 

Aw.BHt lnd.CULS ■ 

Annttase & Rhodes 

BBS Design Group (USAS) 

Button Croup — ...... 

Buy Tiecfanotoglac — 

CCL Group Ordinary 

CCL Group 1156 Cum. Prof. — 
Carborundum Ordinary ■ ......... 

Carborundum 7396 Pwf. — — . 

GeotgoBtalr 

Ish Group — — ...... ... 

l i y l i wm Grow 

MuttihousoNV CAimtSS 

Record HoknngKSE} 

Record Hldga.lflpcPf.(SE>_ 
Robert Jenridos 

Sc mif/nm .— 

Tordv&Carfirie 

Trevtan Holdings — 

Unllodk Holdings (SE> 

Walter Alexander <SE) ■ 

W.S. Yeates — 

West Yuries, lad. Hasp. (USDS) 

designated <SE) and (USND an 
1 of The Stock Exchange. Other 
lb* rates of FI M BRA. 


214 

54b 

66ri 

190M 

200 

240 

1 dealt Hi 


Gram Yield 

Chop— dN-Cp) 96 WE 
. — 1 M 45 75 

-1 - 103 ) 50 — 

— 42 131 45 

-5 Z 1 3.7 as 

-2 2-7 Ub 28 A 

-2 *3 28 133 

-2 113 43 - 6.9 

—2 .337 .113 . — 

—2 SA 33 13.9 

+2 10.7 103 — 

-2 U 23 41 

-2 — — — 

-3 3-4 30 HjO 

-40 — — 127 

— oa — 14.7 

— U1.ULA — 

— — — 20 

— 53 4.4 4.9 

-2 60 sa UM 

4-2 0-8 3 j 4 90 

-4 20 40 120 

-4 5.9 31 140 

— 17.4 87 200 

— 33 3.9 14.9 

subject to the rotes and 
Rated above ara dealt in 




..na 

:: -;l 






3^ 








?amc 



fzL 


F 

m— I 

“3® j 

EMM 

emu 

Sana 

MK9mO_ 

JWWCaft 

<— »— c. 




v 




ssss 


!■ - 1 a/- dl l . 




•msi 










3e 






Granville & Company Lhoitcd OranviBe Dxvles Cofannn Li mited 

8 Lovat Lane. London EC3R8BP . 27 Lovxt Lane, London EC3R8DT 

Tekpbooe 01-621 121Z fB TdepboneOl-dZI 1212 

-. Member of FIMBRA kSJ Membet of the Seodc Ex chan g e 


Member of the Stock Exchange 


TOKYO TRUST SA. 


An iato r im Dividend rfUSl 0.10 per dwe wifl be pa yabl e on 
27th November 1987 to boUero on the Resister on 3rd November and to 
holders of tbe Bearer Share* against presentation of Coupon Na29 at the 
Paying Ageuts- 

Shwer & FMedhndcr Ltd 
21 New Street. London EC2M 4HR 
OR 

Kiedkdnnk SA Ltiranbooigeobe 
43 Boutevunl Boyl, Unembootg 

By aider of the Band 

TOKYO TRUST SA. 









Sis s 










t' 


:E S 

-1.7 147 

» t aw 
i aw 
tw 
-M L97 

tg 

“la 

& 


-2J| SB 
SLOT 



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LONDON SHARE SERVICE 



AMERICANS — Continued 


rm 

fM Low 


M 

» u> 

12 2ltz25 


UJr 

E3m \3Jfl21 



- 25 - 
~ 05 — 

52 — 

- M - 
uuffl 
22 77 U 

- 52 - 

- 42 - 

- «4r - 
2A 48 UL9 
UU1U 
27 42 114 
21 5.9 &A 
29 77 72 

- « - 
































































































































































































'cJpjivc^ i 


LONDON SHARE SERVICE 































































































































r 


46 


LONDON STOCK EXCHANGE 


Financial Times Friday November 6 1987 


Ararat DoS* Data 


•Rat 

Ogtim 

Dedra- 

Lm 

Assam 

Map 

(has 

DeaUari 

Dir 

0a» 

Nat 5 

NotS 

No* 16 

Nm9 

Nor 19 

Not 28 

Nor 38 

Nat 23 

Dec 3 

Dec 4 

Dec 14 


Am (toafetgn may alia price tram 
(MWam two tMMnaaa daya aatflar . 


THE UK stock markets, respond- 
ing swiftly to the reduction in 
the West German Lombard rate, 
recovered early losses and 
climbed into plus territory in the 
second half of yesterday's ses- 
sion. The recovery was some* 
what cautious and disappoint- 
ment that the German 
authorities had not cut their dis- 
count rate took the top off bond 
prices in London. 

The action from the Bundes- 
bank, soon Joined by a discount 
rate cut In Switzerland and by 
US prime rate cuts, encouraged 
hopes in London that the major 
industrial countries will act to- 
gether on the problems facing 
global economies and financial 
markets. 

However, with the US dollar at 
new loans again, London remains 
keenly aware that share prices 
can only recover lasting confi- 
dence if there is action to cut the 
US trade and budget deficits, 
preferably, says the market, be- 
fore the next set of monthly US 
trade figures, which are due next 
week. 

The day started poorly far eq- 
uities, with investors discour- 
aged by further falls in the dol- 
lar. Liquidity shortages remained 
a factor - the big investment 
funds have to plan for cash calls 
totalling around SSOOrn over the 
next' few weeks. 

Market indices slid steadily 
downhill at first, quickl y p ene- 
trating 
port Tc 


Equities reverse 

gains 


buyers. There were small gains 
among the consumer stocks, 
which had already responded to 
this week's cut in UK bank base 
rates which is likely to keep con* 
suraer spending high. 

Government bonds were In 
good form from the opening, 
with the short end performing 
equally with longer-dated stocks 
as the City scented, via London 
money market rates, that anoth- 
er cut in bank base rates was on 
the cards. . 

Equally significant was the 
continued rise in prices for In- 
dex-linked Gilts, which have tak- 
en alarm at the warning, in the 
UK Chancellor's Autumn eco- 
nomic statement, that domestic 
inflation could move higher next 
year. I-L stocks jumped by 
points before profit-taking cut 
the gain to a net % or so. 

The long end of the market 
surged up by 1% points initially 
as investors continued to show 
strong preference for Govern- 
ment paper over ordinary shares. 
Pension funds, in particular, are 
believed to be confining new 
cash investment to the 
Gilt-edged sector. 

But a gap opened between 
cash bona ana future prices, 
reflecting some disappointment 
at the absence of a cut in Ger- 
man discount rate. Bond prices 


early falls to end with widespread 

V *■ lead Advertising A 

as Gilts advance again 


FINANCIAL TIMES STOCK INDICES 




Non. 

4 



Art. 

YtW 

1907 

Hue* CmoMan 


5 - 

3 

2 

30 

HP 

«9» 

Lm 

m | 

Uv 




9054 

MM 

1957 

8340 

9352 

83J3 


IZ7X ' 

4918 






(MIS 

awin 

(M/35) 

BOOS 


9447 

93.90 

9107 

9955 

93J6 

aus 

99J2 

9023 


10SX 

5053 






QVM 

Oil) 

QBUK7I 

wist 


1287.9 

325*6 

mi 

33427 

1360.9 

1303,9 

19262 

Z2S55 


19262 

494 






0617) 

(4/11) 

060787) 

ooawM 




3056 

SLAV 

3321 

2915 

4975 

2735 


734.7 

<35 






wn 

(Mil 

OSOfSB 

(2600771) 



M) 

451 

460 

455 

435 


S.E ACTIVITY 



U5S 


13.96 

11X3 

1150 

1004 

Mtocr 

Not.4 

floO 

WE Ratio (a«U(*) ■ 

9.99 

]nw 

1070 

jaw 

1219 

CatEOMOBaWta 

1555 

295.7 

1474 

3145 

non 

SEAQ Bawtas Upa) — ~ 

3*253 

4*455 

96,788 

<3,020 

59J38 

32328 


177463 

4*631 

167352 

4*460 

TtUKI 









62423 

63.406 

46.033 

fitt&taA tagta 

1365 

348A 

30582 

1362 

56U 

wit 



806.9 

MU 

555.0 

7345 

346.7 



-j 



— 7- 





1 pan. 
1258.4 



4 PJTL 

1282.5 


Day's High 12923 Day's low 1233.0 

tab 100 Cart. Sacs 15/1(226, Fbed in. 192A, Mb*? 1/713% Goto Mints Un/SS, S E Actbty * MM&23. 


LONDON REPORT AND LATEST SHARE INDEX: TEL. 01-246 8026 




Fielder takeover 
10 to 250p and 
33 to 283p reflecting 
sideratfona.Tftto 
particularly dull 

Berlafordt atul de- 
■ t h o u g h t s that the As- 
sociated British Foods’ 400p per 
dure cash offer for the compeny 
is unlikely to procee d , shed 8 
more to 26&P-AB Foods’ bid for 
Bertsford is not being r efeu o d to 
the MonopoUtt Commission. 

Leading Hotels enjoyed a good 
two-way trade. Grand lfetxo- 
poUtan picked up from an fad- 


ley investments were notewor- 
thy for a fall oT 36 to a new low 
for the year of 85p, whHeAsaber 
Indnatrial dipped 40 to 375p fol- 
lowing the half-year results. 
Dobson Park Improved 2to»7p 
in resp ons e to news of the film 


ness CosmukutsH weak* 
after the agree- 
the acquisition 
* continued to 
lead Advertising Agencies lower, 
ending 20 down at 38Sp while 
WCRS gave up 9 at 200p. 
Properties staged a tentative 


recovery having been distinctly 


ti 


contract for apod carrying equip- 
ment from Channel Tunnel Ex- 


cavation. but acquisition news 
faHed to help Lodge Care which 
dosed a few pence lower, at Z43p/ 
News of halved flnt-half prof- 
its and a cautious statement 
about current trading depressed 
Grampian TV widen fell 7 to 
43p. Hldmuaner Leisure set- 
tled 5 off ax 380p! the company 
has sold Its stake in Boddingtons 
Bre w ery incuring a small lass on 
the transaction. 

Lasses again outnumbered 


improved 4 to 185p. Hftrftkr, 
where as expect ed the rights is- 
sue flopped badly with only 
some 2 per cent of the issue tak- 


ended off the top with net gains 
olnt. 


the important FT-SE sup- 
31. 1600 on which 


port level o: 
many investment predictions 
hang at present. 

Some investors had clearly 
been awaiting news from West 
German, and the equity sector 
turned abruptly upwards when 
the Lombard rate cut flashed 
over the video-screens. A 30 
point fall on the FT-SE was soon 
replaced by a similar rise. 

After some backing and filling 
as traders reshaped their trading 
books, the FT-SE 100 Index 
closed a net 30.7 up at 16388. 

BP "new” partly-paid shares 
were a late feature on market 
belief that a sustain tial stake of 
over 300m shares had been built 
up by the Kuwait Investment Of- 
fice. 

The 'new* dosed at 79M, up 
2% on the day, with 112m shares 
going through the Seaqsystem. 
The ‘old’ edged up 5 to 251p. 

Recoveries in the major ex- 
porting company stocks were re- 
strained by the weakness of the 
dollar which will hurt US sales. 
Glaxo, ICI and Fisons chalked 
up fairly modest gains. But there 
were sharp upswings in financial 
sector stocks, which have been 
identified as defensive Issues for 
a market threatened with indus- 
trial recession. 

Natwest, Barclays, MMimwd 
and Royal Insurance all found 


of around one poi 

The big-four banks made rapid 
and strong progress, despite the 
obvious affects on profits that 
the recent base rate cats will 
have. NatWest advanced 28 to 
553p, while gains of around 20 
were common to Barclays, 443p 
and Midland, 348 p. Lloyds 
were 18 higher at 243p. 

Merchant banks were much 
quieter after the recent spate of 
rumours of major market- mak- 
ing losses caused by the recent 


market plunge. Elsewhere, 
ntinued it 


FNFC continued its recent errat- 
ic performance and jumped 27 to 
22sp, helped by a recommenda- 
tion from securities house Klein- 
wort Grieveson. 

Life assurances raced ahead af- 
ter a poor start to the day. Ab- 
bey jumped 8 to 213p, after an 
initial decline to 200p while Le- 
gal A General rose a like 
amount to 263p. London and 
Manchester, on the other hand, 
performed poorly and dipped 8 
to 212p as it was revealed that 
the Kuwaiti Investment Office 
had acquired 889m ahares( or 
around 9.6 per cent) of the com- 
pany's shares. 

In composites Commercial 
Union put on 20 to 31 lp ahead 
of next Wednesday's interims. 
Royala jumped 25 to 400p 
reflecting a bear squeeze. Dollar 
weakness continued to upset in- 
surance brokers where Sedg- 
wick slipped 6 more to 186p. Re- 
newed worries over the 
possibility of more defections 
triggered fresh weakness in Wil- 


lis Faber which retreated 4 more 
to 217p. 

Brewery investors paid little 
attention to fresh stories of -pred- 
atory moves by US and Austra- 
lian groups until the main body 
of Alpha stocks began the after- 
noon recovery. Allied-Lyons 
then advanced swiftly from a 
lower early level of 315pto close 
11 up on the day at 331p; the 
disclosure that Alan Bona, the 
Australian entrepreneur, had a 
stake of 2.8 per cent revived 
speculation that US brewer An- 
heuser Busch was purchasing 
shares. Whitbread "A" also 
staged a smart rally to end a net 
7 higher at 271p but Baas, 796p, 
and Guinness, 244p, were able 
crnly to erase their earlier losses. 
Scottish & Newcastle rebound- 
ed 8 to 215p, GzeenaU Whitley 
regained 11 to 164p and Back- 
ley’s 11 to 171p. But announce- 
ments of increased share stakes 
failed to move either Greene 
King, 450p, or Morlaad, 475p- 
Elders KL has raised its share- 
holding in the farmer to 985 per 
cent, while Whitbread invest- 
ment now owns over 43 per cent 
of Morland. Elsewhere, cider- 
maker Merry down, staged a 
tentative rally and ended ■ 15 
dearer at 295p. 

Buyers began nibbling at se- 
lected leading Building issues af- 
ter initial nervousness evaporat- 
ed. The final tone was much 
steadier than of late and Bine 
Circle managed a gain of 10 at 
325p while Bedland rallied 8 to 
377p and Tarmac picked up 7 at 
204p. Rugby, where revived 
buying apparently uncovered a 


FT-ACTUARIES INDICES 


These tafias an Ita jblrt canpBrtin of fe Ffamcsrf Time* 
the Inslilate of Actuaries and ta Faculty of tenants 


EQUITY GROUPS 
& SUB-SECTIONS 


Figures hi parentheses show number of 
stacks per section 


49 


51 


CAPTTAL GOODS (ZU). 


BuOdtag Materials GO). 


Contracting, Coostroction 03) . 
BecWcate Q4) - — ■ 


Electronics (33) . 

Mechanical Engineering (60)— 
Metals and Meal Forming (71. 
(Mi- 


Other Industrial Materials 02). 

CONSUMES GROUP (183) 

Brewers and Distillers ( 21 ) - 


Food Manufacturing (23) . 
Food Retailing (17). 


Health and Household Products GO). 
Leisure GO) 


Packaging & Paper (16). 


PmHsMng & Printing 05) . 
Stores 05). 


Textiles 06). 


OTHER GROUPS (87). 
Agenctes (17). 


Chemicals (2D. 


Conglomerates 03). 


supping and Transport OD. 


Telephone Networks (2) . 

Miscellaneous (23). 


INDUSTRIAL GROUP (483). 


Tb»sday November 5 1987 


index 

No. 


ElL 

Emdags 

VMM 

(Hbl) 

Gross 

ON. 

VMM 

(Acta 

(27%) 

EsL 

P/E 

Rta 

(Net) 

V 

to 8ft 

hdR 
. Ha 

brier 

No. 

tata . 
.(to. 

65622 

+0.4 

10.73 

432 

XL78 

1827 

65321 

(IBM 

787X6 

86441 

+13 

10.75 

426 

1138 

22.91 

85158 

49646 

93444 

J17U3 

-04 

1032 

430 

1235 

2956 

117560 

123981 

329083 

174637 

+13 

1037 

4.99 

1258 

5451 

171*29 

175315 

M67X5 

1493X7 

+03 

1050 

338 

1258 

3533 

1*49.70 

352254 

155732 

322.63 

-13 

1133 

4.98 

urn 

Mm 

325.92 

34887 

36175 

377X4 

-13 

1034 

137 

3136 

941 

38266 

44183 

4BJ7 

23036 

— 1.7 

3331 

553 

838 

556 

23*58 

2*741 

264*8 

312224 

+33 

928 

452 

1251 

3658 

110*21 

115253 

117839 

96136 

+L7 

838 

337 

3434 

18.71 

9*486 

98161 

182353 

90452 

+23 

1U0 

440 

1137 

1752 

0622 

91AM 

9*9X9 

75250 

+1-9 

956 

445 

1341 

1666 

737.94 

77216 

79830 

195752 

+13 

734 

301 

1736 

3937 

192755 

246196 

207813 

167251 

+2.9 

6.72 

235 

1721 

1651 

UKU 

168689 

1784.98 

99159 

rl „ 

GOG 

458 

1554 

2846 

99219 

limtt 

I0BLX7 

46276 



193 

357 

14.75 

1143 

46286 

482.97 

*9429 

30*6.92 

-1.7 

.759 

ATT 

1756 

6759 

309490 

334257 

337587 

out 

+23 

176 

355 

1539 

16.95 

81563 

83642 

87747 

559.92 

+33 

1135 

442 

1028 

1257 

5039 

Hill 

61688 

79534 

+13 

1193 

456 

1150 

2852 

706X7 

anas 

83422 

948.7* 

—03 

659 

239 

19.94 

16.79 

95456 

999.99 

1024*8 

97262 

+25 

3107 

4.70 

1244 

3340 

95955 

96A97 

104CL51 

105236 

*1.9 

9.77 

4j44 

11.71 

2239 

143251 

105518 

113173 

U5856 

-03 

1127 

4.99 

3229 

5X54 

165555 

173489 

177123 

8*236 

+0.9 

1253 

458 

1109 

18.98 

13468 

H5J3 

•8677 

U85J5 

+13 

1358 

426 

838 

3257 

109267 

112936 

315742 

84*53 

+12 

950 

455 

1255 

19.71 



•98*2 


Wed 

Nor 

4 


Toe 

Nov 

3 


Ywr 

ago 

(aw*®*) 


Index 

No. 


OU5 


113129 

175324 

146252 

37224 

34L71 

2M23 

1237.42 


95441 

71734 

1177.95 

153077 

968.95 


S72» 

54766 

79381 


989.74 


77630 

U323G 


Oil A Gas (17). 




8*415 


591 

500 SHARE INDEX (500) 


+13 

988 

*36 



89763 

93089 

96383 

89262 













62 


unn 

+48 

2285 

683 

680 





67257 












66 


AM 11 

+34 

_ 

569 





50545 

4CU1 











68 


358,90 

-1.9 









69 

Pmfwty CApi 

86147 

+L2 

581 

383 

22.96 

]£J2 





70 

Otter Financial (29) 

373.71 

+14 

962 

430 

1381 

1839 

368 A 

397.97 

413X7 

35256 



790X1 

-04 











36473 

+0X 

1286 








91 

Otttsta Traders (10) ... . .... 

47143 

-06 

1050 

560 

1146 

33.93 

87618 

89310 

9MX5 

75323 

99 

ALL-SHARE INDEX (720) 

82490 

+1X 

- 

486 

- 

2236 


M41* 

87680 

41549 



Index 

Dio'S 

Dors 

Day's 

No* 

Ho* 

No* 

Oct 

Oct 

Year 



No. 

°5HE_ 

HU 

Low 

4 

3 

2 

30 

29 

ago 


FT-SE 100 SHARE INDEX 4 

16388 

*307 

16425 

15778 

16081 

1653.9 

17237 

17498 

im» 

16*45 


FIXED INTEI 

REST 



AVEOAEE GROSS 
REDEMPTION YIELDS ‘ 

Tin 

No* 

5 

Wed 

Nov 

4 

Year 

(approxJ 

PRICE 

INDICES 

Tin 

Nov 

Day's 

dm 

Wed 

Nov 

xda<S. 

tnfaqi 

xriactf- 

1987 

1 

7 

blttd 8o— 
lorn ■ 


884 

B.95 

8.90 

A90 

945 

■86 

942 

8.95 

945 

989 

9.73 

1086 

1086 

11.10 

1058 

1 

BriMifiswtat 

224X0 

+089 

123.79 

» 

9X6 

3 

4 

5 

U^|d^y^ 


2 

5-15 yeas 

14382 

+186 

14U4 


1244 

6 

HW 


947 

8.98 

944 

983 

1084 

11.15 




150.92 

048 

3281 



4 

5 

■ ■ ■ ■ 
irmxmnBNQtaMn 

All OnriK 

17084 

159X0 

+0.92 

+0.95 

168.79 

J3I26 

086 

1345 

1180 

9 

30 

lm ih+iii erit k... . . 

1 

969 

882 

924 

869 

1BJ2 

1867 

6 

hdn-IJrinri 

32489 

+8J5 

+067 

12346 


220 

U 

12 

13 

hta-LtoM 

Inffattoa rale 5% 

^ 5jn- 

262 

267 

436 




Tin nr 


289 

lilfaOaa rate 10% ~ 5m_ 

288 

364 

299 

8 

AH stocks 

111.71 

+868 

320.96 


282 

14 

WtMhn rate 10% QverSyn- 

483 

487 

365 












9 

OdBtacsllflm. 

11935 

+185 

117.93 

086 

9X3 

16 

IM 

15 yean— 
Sycarv- 

1065 

3065 

1063 

3863 

11X3 

1146 











Piwm - 






18 



1082 

1065 

1L» 












♦Opening Iota 16036; 10 «i 1607.6; 11 am 1587.1; Now 15952; 1 pm 1603 Ji 2 pffl 16110; 3 pm 1642.4; 130 ph 16312; 4 pm 16315 


t Flat yield. I _ 
anuphtf 


stock shortage, firmed 5 to 2l4p gains throughout a stores sector 
and BPB Industries, recently already sustained by the latest 
the subject of Australian stake- half point cut in bank base rates. 


. _ucxed up 7 at 
264p. Against the trend, Stee- 


buflding rumours, picked 1 up7 at Bathers, a poor market during 

the past week or so reflecting its 
exposure to the US and talk of 
numerous brokers 
their profits estimates, 
strongly to dose a net 16 higher 
at 235p. Burton Group also 
made good pr ogress, and rose 10 
interest 
Dixons 

from the firmer 20 to 260p. while the recent corn- 
trend and extended pany presentation of t he DIY 
subsidiary boosted WH Smith 
’A’ 15 to 330p. Storehouse ad- 
ded 11 to 236p following publica- 
tion of the defence document to 
the Senior share exchange bid. 
The interim results failed to in- 


tley shed 14 to 272p; brokers 
Morgan Grenfell, having seen the 

price hold up relatively well re- 
cently, don’t expect the shares to 
outperform in the short- term. 

Stanley Miller fell 22 to 48p on _______ 

news of acutely disppointing to 232 jk Strong 
half-year figures. from one quarts' 


overall 

Wednesday’s gain of 3k by a fur- 
ther % to dose at £10%. 

The electricals and electronics 
issues were at the forefront of 
the market upturn. British Te- 
lecom edged up a couple of 


S^^* dl7W * ta97p ' 

International stocks eventually 
staged a welcome rally, intently 
the trend was to lower levels, 
but prices began to reco v er after 
the first hour or so of trading 
with the movement gaining im- 
petus as Wall Street moved 
ahead In tire early riwBngff in 
the wake of the cuts in US prime 
rates. Trading was a little more 
brisk than of late, with Bee- 
dram ending 27 to the good at 
424p in a volume of some 25m 
shares. Interest expanded in 
Hanson (8.4m,) which closed a 
few pence better at 129p. BOO 
regained 14 to 323p, but Giant 
settled only a tirade better on 
balance at £10%. Wellcome. 
327p, and Fisons, SSSp, dosed 
15 and 13 higher respectively. 
Seed International, in con- 
trast, weakened afresh following 
comment on the half-year fig- 


signs of stability, 
considerations continued to 
weigh on Jaguar, which fell 8 
further to 28Dp, but Loess In- 
dustries regained a snrafi early 
lorn to end 6 up on balance at 
GOOp. Other Component stocks 
tenosd to lose fresh ground with 
Dowty dosing 8 lower at 
and Armstrong Equipment 


doU at one stage. Land 

tie* picked up from 4l8p to 
close 6 higher at 43Qp, while 
MEPC, down to 383p «t one 
point, finished only a couple- of 
pence cheaper on balance at 
3$8p. Pe ac h ey revived with an 
improvement of 10 at 328p snd 
Slough Esta te* hardened a few 
pence to 2D8p, Great Portland 
Batatas were 9 higher at 215p-. 
the Interim results are due next 
Wednesday. Estate agents Han- 
over Drue* shed 25 to 200p de- 
spite revealing good half-year 
figures, but Koedkangk, a dull 
market recently, rallied 30 to 
470p. fancy rose 28 to 348p in a 

BAT iMtostriw were a lively 
market (some 6m shares changed 
hands yesterday) and dosed 9 to 
the good at 434p; interest was 
enlivened by a recommendation 
for Tobacco shares from US in- 
vestment house Kidder Peabody. 


Traditional Options 


off at U5p. BTS gave up Tat 86p 
while car manufacturer Bower 


5 more to 6Qp. Specialist 


maker Marcia dropped 15 
ictuadons 



Thom KMT, rated a good recov- 
ery by a number of leading bro- 
kers, picked up well and dosed a 
net 11 higher at 459p. Cable and 
Wireless were 3 harder at 296p 
while flesaey held on to a mar- 
ginal gain at 144p. BICC, still 
boosted by a recent recommen- 
dation from securities house 
County NatWest, jumped 17 to 
307n. 

Elsewhere. Electrocompo- 


one stage on rumours that the 
MFI management buy-out had 
been pulled, but a statement to 
the contrary by the MFI manage- 
ment prompted a strong rally in 
the price which eventually 
closed 3 higher on balance at 
164p. ttswfcs Hovla McDougall 
revived strongly on Goodman 


Elsewhere, Cookson, particu- 
larly hard hit in the recent shak- 
eout because of its US e xp os u re, 
rallied to dose 42 highar at 460p 
in the wake of a County Natwest 
buy circular. British A e ros pa ce 
ana Beaters traded on a steadi- 
er note and dosed little altered 
on the day at 810p and 478p 
respectively. News that Mr Rob- 
ert Maxwell has increased his 
stake in the company failed to 
> De La Roe which dipped 25 
to 378u. Maxwell Commnnfte*- 

2 to 226p. Brlor- 


to 11 Dp. Price fluctuations in 
Distributors were far smaller 
than recently with the exception 
at Jessups, down 8 at 183p. 

Newspapers displayed con- 
trasting movements at the dose. 
United enjoyed a limited 
amount of late support and set- 
tled 10 dearer at 438p but Asso- 
ciated remained inactive at 
4I8p, for a net loss of 9. Bond, 
particularly hard hit during the 
recent depression, attracted 
cheap buyers and nudged up a 
few pence to 150p but changes 
else whe r e were generally against 
holders. Irish-based CSondalldn 
were lowered 100 to S5p and 
Blenheim Exhibitions lost 70 
to 45fip. International Buaf- 


• First dealings Nov 02* 
Last dealings Nov 13* Last 
declarations Feb 04* For Set- 
tlement Feb l&For rate indica- 
tions see end of London Share 
Service 

Stocks to attract money for the 
call Included Trlxnoco, Central 
and Sheerwood, Kwik Fit, 
Conroy Petroleum, Amstrad, 
Control Securities, Sears, Ber- 
keley and Hay Bill, Green- 
wich Resources, BSG interna- 
tional, SUvlin, Folly Feck, 
Woilcoaae, Unilever, Bryan 
Holdings, J- Crowther, Cluff 


OU, Astra Holdings, S. Miller, 
isolidat 


Premier Consolidated, Rota- 
print, Ferranti, PentUod In- 
dustries, Helene of London, C. 
Baynes, Rover and Bhxe Ar- 
row. a put was arranged in 
Thames TV, while double op- 
tions were transacted in Poking- 
ton and CL Baynes. 


TRADING VOLUME IN MAJOR STOCKS 


Tbt fbUowtng k bnad on tndbg.wftne for Mpta Monties dealt through the SEAQ 
system yesterday until 5 pm 


ootr* 




BAA. 


■AT. 


dipped 3 to 157p in the 
of the interim 


NEW HIGHS AND LOWS FOR 1987 


vnt. 


up 


wake of the interim profits, 
from £18. lm to £2d6m pre-tax 
and the proposed acqudritian-Ox- 
ford I ns tr um ents, scheduled to 
announce interim results next 
Thursday, dropped 15 to 160p. 

Talk of a stock shortage and a 
strong rally by other sectors of 
equity -markets triggered good 


WW MOHS era. 

BRITISH SUNOS (?) 

TrsMrape.1M1.Trsm.Spc.lJiJU)08 A 
(Eiopd.i.coBv.aikpo.'ai 

AH..ConsJZHpcL.Tra*s^Mpa .Trsos 
2PC.19B8 LL. Dm. 2paLL.t0MUNrjMNK 

a owe oavratuajssuea m o — 

iaw*C. 2010 LOANS ffl N rt tawlek Angls 

I 9 p C . 1 1 . 7 . a 8 . o ® 

iopc.iAaajpB.i09hpsJB.aia. mousm- 
Atatoi' 


ncw lows ora 


3JS0 


(4) C A MAP M W CW) 

■!»)%^| 

AUmMURMICtnH 


PMWITT J 


CS7)TVmO MARKET n. 


LONDON TRADED OPTIONS 


X000 

MRS Bhitaa Zjm 

Om- Btor CM* — 635 

an booo moo 

___ ml: ZSK 

SSSSS; SStSS=: ^ 

pj iwns «•_ _ .... 3L4,Doa 

12.000 
w 

92 

2,000 


-tatoo 



r~ 

CALLS 


’ PUTS 

o 

o 

O 

a 

!C3 

.Egg 

ABM fata 

300 

45 

60 

67 

15 

20 


C*331> 

330 

30 

43 

50 

28 

37 



360 

17 

28 

40 

45 

53 


BriL Alragqs 

130 

20 

25 

EH 

18 

25 

30 

(*132) 

1*0 

15 

22 

EH 

22 

30 

35 


lfiO 

8 

15 

Efl 

38 

41 

40 

tai ',.9 F.— M 

300 

32 

42 

60 

35 

45 


cw m 

330 

22 

27 

37 

4S 

55 



360 

12 

38 

25 

65 

80 


BJ*. 

E3 

E3I 

PI 

44 

15 

25 


(*25D 


i’ra 


38 

27 

38 



EJ 

Efl 

LJ 

27 


52 



■ ViJ 

O 


100 

65 

75 

85 

rotu 

■ 

11 

55 

75 

95 

110 

115 


LJ 

Efl 

35 

X 

135 

145 

150 

tint. Grid 

730 

110 

140 

X70 

60 

90 

120 

(*75B) 

800 

80 

120 

150 

90 

130 

160 


850 

65 

100 

130 

140 

170 

200 


300 

47 

60 

70 

25 

I H 

^T^^flfl 


330 

32 

42 

SO 

45 

Efl 


bnmh 

3W 

22 

30 

40 

70 

Efl 


pm 

300 

45 

55 

65 

30 

40 



330 

25 

35 

45 

45 

» 

flT^B 


360 

13 

22 

30 

65 

75. 


H 

390 

7 

35 

22 

90 

100 

ESS 


280 

50 

65 

95 

28 

42 

45 


300 

40 

5Z 

75 

40 

<3 

55 


330 

29 

45 

58 

60 

64 

67 

W 1 1 i 1 

3 SO 

20 

40 

50 

80 

87 

95 

MMWGw 

130 

20 

2* 

EH 

10 

EH 

IfK 

P 136) 

135 

16 

— 

tfl 

U 

Efl 



140 


19 

rl 

— 

tj 



1*5 

11 

— 

Efl 

20 

n 

CM 

G6X. 

160 

35 

*5 

55 

8 

13 

■TTBf 

C*1M» 

180 

24 

30 

39 

16 

22 



200 

13 

20 

28 

28 

33 


CXN. 

200 

32 

47 

57 

|| 

»1 


raw 

260 

23 

38 

50 

EH 

EH 



280 

37 

32 

43 

Efl 

Efl 


Grand Mat. 

360 

50 

60 

75 

18 

o 


(*378) 

390 

30 

40 

55 

33 

EH 



420 

18 

30 

40 

50 

Efl 


LU. 

1000 

135 

160 

140 

70 

105 

105 

raoso 

1050 

110 

1» 

155 

90 

330 

125 


1100 

85 

115 

135 

120 

155 

160 


280 

37 

50 

63 

30 

40 

50 

rani 

300 

30 

42 

57 

43 

52 

65 


330 

18 

32 

47 

62 

72 

80 

Land SccnrMts 

420 

» 

65 

75 

42 

50 

55 

omi 

460 

30 

40 

50 

55 

62 

65 


500 

17 

2S 

37 

45 

90 

95 

Marta A Span. 

180 

28 

36 

44 

u 

15 

20 

C*1«U 

200 

16 

26 

30 

27 

28 

32 


220 

8 

18 

26 

38 

46 

46 

BritgB 

200 

42 

50 

60 

17 

29 


(*224) 

220 

30 

42 

52 

25 

» 



240 

18 

30 

43 

35 

43 


Rsft-ltafDe 

mt:,i 

20 

|1| 

35 

12 

FH 


C12SJ 

mnl 

13 

EH 

27 

20 

EH 



El 

9 

Efl 

20 

27 

Efl 


taB Trans. 

990 

100 

130 

155 

60 

95 

125 

(*9B® 

1000 

75 

103 

130 

89 

125 

150 


1050 

53 

80 

113 

115 

155 

185 


r 1 

■ ■ 

47 

91 

13 

17 


(*236) 


Eg 

35 

43 

27 

30 




Efl 

30 

35 

43 

50 


Trafalgar Nora* 

280 

27 

35 

47 

EH 

30 

g~ml 

(*29M 

300 

17 

27 

40 

II 

4fi 



330 

8 

18 

32 

Efl 

62 

EjH 


100 

16 

21 

25 

10 

14 



110 

11 

17 

20 

18 

20 


■ 

120 

9 

12 

15 

23 

27 



280 

*0 

|1 

65 

20 

25 

35 

(*288) 

300 

30 

Efl 

55 

49 

4b 

50 


300 

23 

Efl 

40 

50 

65 

70 





CALLS 

PUTS 1 

Opta 

• -. 

ca 

o 

T7~* 

ezh 

C3 


U5M0 

zoo 

30 





17 

_ 

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(*224) 

220 

22 

35 

45 

18 

27 

37 

240 

12 

27 

35 

30 

37 

45 

DdMn^M. 

EH 

5 

45 

55 

mm 

15 

20 

MSB) 

EH 

32 

42 

H 

22 

37 



7 

23 

33 

Efl 

35 

57 


140 

16 

25 

36 

13 

|| 

22 

160 

7 

17 

23 

23 

Ivfl 

34 


100 

3 

10 

17 

41 

efl 

48 

Pradwdri 

750 

70 

120 

135 

|| 

45 

80 

t*395) 

800 

36 

90 

135 

L fl 

80 

UO 


850 

30 

70 

95 

Efl 

UO 

130 

P. 4 0. 

460 

47 

70 

82 

Efl 

28 

40 

(*4981 

500 

IB 

47 

58 

1 fl 

45 

35 



6 

— 

— 

Efl 




200 

18 

33 

42 

13 

23 

28 

(*202) 

220 

8 

22 

33 

27 

35 

40 


5 

17 

24 

40 

47 

5* 

1 1 b jnMM 

n 

33 

60 

75 

20 

40 

55 


300 

17 

45- 

65. 

35 

M 

75 


320 

10 

— 

— 

50 

— 

— 

Vta Reek 

90 

9 

15 

22 

13 

18 

22 

(•MB) 

M» 

3 

12 

18 

18 

23 

28 

1Z0 

2 

8 

14 

28 

33 

35 

lEtssaca 



6A 


V* 

H r *V 



flf''fl 


4d 


0?. 

K!:l 



flvfl 

mi 

25 


fP| 

[J 

— 


U 

- V* 

E9 

OS 

EJ 

— 

tai^K:»vr-R 

112 

C9 

_ 

Q 



_ 

§ 

(*115) 

114 

H 

— 

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— 

— 


(TfW 


«• 


Ejyi 

is 

14 



■ J 1 

Sh 

_g 


2A 



jjl 

n 

L3 

£ 

4S 



[ Option 

No, 

Feb 

tar 

Not 

Feta 

toy 

Brit Am 

300 

25 

45 

55 

12 

25 ' 

35 

1*310) 

330 

10 

» 

49 

30 

48 

55 


360 

4 

25 

35 

52 

68 

73 

BAA 

100 

8 

20 

n 

10 

17 

20 

(*102) 

110 

4 

13 

1R 

L5 

22 

27 


120 

2 

10 

15 

22 

30 

30 

BAT Inch 

390 

n 

75 

e 

13 

18 

a 

C*4» 

420 

» 

55 

65 

20 

30 .. 

38 


460 

10 

35 

45 

40 

50 

60 

Brit. Tricon 

220 

z* 

25 

35 

13 

22 

28 

nm 

2*0 

5 

17 

27 

24 

33 

43 


2 tO 

3 

n 

18 

44 

50 

54 

Oritay Sctrmam 

200 

20 

32 

40 

12 

17 

21 

(*207) . 

220 

12 

24 

29 

27 

33 

35 

Cwnrn 

240 

20 

32 

*0 

15 

Z2 

28 

(*2*3) 

260 

8 

22 

30 

30 

37 

43 


280 

3 

15 

22 

42 

47 

52 

Ladbrahr- 

300 

15 

28 

45 

17 

31 

43 

(*29B) 

330 

6 

20 

33 

40 

50 

58 


360 

4 

12 

23 

67 

70 

80 


Opta 

lea 

EZJ 

m 

Dec 

IO 

IF ■ 

Amstrad 

no 

73 



IS 

17 

27 

(*317) 

320 

18 

H. H 

135 

20 

27 

32 

130 

12 

tzM 

Em 

30 

30 

37 

Badm 

(*443) 

420 

70 

80 

95 

fl""W 

Efl 

Eljta 

460 

45 

60 

75 


Efl 

[~T^| 

500 

23 

« 

60 

mim 

Efl 

LflK 


390 

52 

70 

87 

El 

EM 


(*424) 

420 

35 

58 

72 

eh 

Efl 


4W 

23 

40 

M 

Efl 

tfl 



220 

27 

fPM 

W '■ H 

18 

Pfl 

|ERB 


240 

14 

Efl 

» 

33 

Efl 

lfl 


260 

9 

EM 

ln_ 

45 

Lfl 

its 

BUT 

220 

<2 

Efl 


15 

20 

25 

ra*u 

240 

25 

tfl 

42 

22 

30 

35 

260 

15 

Efl 

o.-m 

■ 37 

42 

40 

Bine Circle 

300 

42- 

62 

68 


28 

35 

(*324) 

390 

28 

45 

50 

a * ■ 

40 

52 

390 

17 

— 

— 

U 

Q 


De Beers 

1050 

100 

Q| 


60 

B| 


raw® 

1200 

TO 



110 



1200 

50 

9 


190 

efl 



240 

35 

43 

53 

17 

Efl 


rawo 

260 

23 

32 

43 

» 

Efl 


280 

15 

23 

35 

40 

bfl 



WVUM 

□i 

135 

170 

75 

9S 

no 

(•nos) 

JBSO 

Efl 

US 

150 

90 

120 

us 

1100 

Efl 

95 

130 

120 

150 

165 


1350 

Lfl 

80 

110 

160 

US 

ZOO 

fcflflT'"’"‘~ ,, flflfl 

110 

>25 

2B 

II 

5 

|| 

12 


120 

U 

22 

Efl 

9 

Efl 

U 

130 

33 

17 

Ea 

14 

Efl 

20 


140 

8 

13 

Efl 

21 

Efl 

28 

■T M * a flfl 

200 

33 

i.a 

48 

12 

20 

25 

ra 14) 

220 

22 


38 

- 23 

30 

33 


Z36 

14 

efl 

— 

35 

— 



330 

» 

70 

80 

30 

40 

55 

(*343) 

360 

35 

» 

70 

40 

55 

65 


390 

20 

40 

50 

65 

75 

90 


120 

14 

20 

25 

14 

Efl 

20 


230 

10 

25 

20 

19 

Efl' 

25 


140 

A 

12 

15 

2b 

Efl 

32 


153 

14 

. 

— 

16 



(155) 

160 

— ' . 

21 

2b- 

• — 

22 

26 


167 

7 

— 

— 

22 

— 



180- 

30 

35 

43 

23 

33 

35 

1186) 

200 

18 

23 

30 

35 

43 

47 

220 

8 

13 

17 

SO 

55 

57 

Than EMI 

*a 

75 

95 

120 

23 

32 

37 

(*459) 

460 

W 

73 

100 

45 

60 

75 

300 

50 

45 

65 

75 

85 

95 

Ua Hater 

tl 

ra 

l-'VI 

90 

25 

Efl 

55 

(*458) 


Lfl 

Efl 

70 

40 

Efl 


eJ 

Lfl 


55 

75 

tfl 

100 

Wtflcome 


so 

70 

85 

20 

25 

38 

(*3271 

310 

35 

55 

70 

35 

45 

55 


360 1 

20. 

40 

55 

50 

65 

70 


Opdon 

Not. 

Dee. 

Jee. 

Fek 

Nor. 

Sec. 

Jen. 

Fek 

FT-SE 

Index 

(*1636) 

1550 

1600 

1650 

1700 

1750 

1800 

120 
93 
73 
S3 
. 40 
30 

155 

13Z- 

110 

90 

.75 

a 

US 

165 

140 

120 

101 

88 

215 

186 

170 

150 

135 

120 

60 

85 

UO 

1*0 

UO 

220 

100 

125 

ISO 

UO 

as 

250 

130 

1*5 

Z75 

205 

US 

270 

155 

175 

215 

245 

275 

310 


Nowatwr 5. T«l OMta SAfti tek 1A7SL Pots 33t7ti. 
FT-SE Mac Uk2£12 tas VO. 
n htto l ffcS «■ *1 SrM. 


CaMqrBGmT^ 

CtaWA ■■■■■. . .. 


DfvCani AMO 

,ni— fis — <«oo 



ite* Ora- ■ 

me 


Kacfcitt A CcL . 


0001 

4.400 

576 

3,700 

535 

966 

2.100 


RMdhAL. 


504 


RTZ . 



33 “ 


7,400 
530 
339 
3JOOO 
049 

3J00 

StacM ASMBtt _ 926 

lJoo 

Sant 6.300 

%4d writ* - ... 2.100 

smyim zina 

3A0O 

HwtaciM a* 

Tlmliin *JDQ 

snA«t n c » '__ rm 

TSB 

Tm 1.460 



RISES AND FALLS YESTERDAY 


Britfah fknds . 


Carpontlas^ Dominion And Forelfla Boodi. 


RrancUl sad Pnpartits . 
Ofh 


Mines. 

ttks. 


Rbe 

111 

29 

301 

131 

27 

- 0 
22 

« 


Falls 

0 

2 

777 

271 

48 

2 

97 

147 


Sane 

2 

24 

508 

227 

39 

12 

77 

79 


Totals . 


666 


W 


968 


LONDON RECENT ISSUES 


ehuities 


hS 


2907 


FA. 

F.F 

TJP. 

rj>. 

FJ». 
220 
FJ». 
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F.P 

Ff. 

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F.P. 


2001 


601 

Son 

(Ol 


0/12 


9000 


2300 


3001 


2001 


2WU 


1202 


901 


2501 


170 

2% 

160 


73 

m 

a 

s 

67 

1M 

23 


B2 

191 

128 

98 

108 

*a 

90 


ISO 

% 


90 

U 

160 

16 

n 

s 

238 

29 




IBritia PctrahM TSh 

fasCTnntlOp -.-I 64 



58 


16 


rarammGas-d<»»p — i 
34 tHnt SdhWi f-T. Wm«J 
75 UUdH UacLtOat 20p 
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IrLBecmd Hh|gt 5 p I 

17S 6scaiSy AnMwi 20$ — f 
ms, jstm&wy n 
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6BIW :i . 


PPM 


90 

68 

165 

26 

78 


a 

£ 


34 

75 

14 

H 

58 

370 

73 

65 

103 

an. 

73 

71 

375 

105 

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C>PiAG^ 






Financial Times Friday November 6 1-987 


.*V 


WORLD STOCK MARKETS 


4 its V :.K AUSTRIA 


AUSTRALIA (Coatimnd) 



OVER-THE-COUNTER 


Sdu Mgk Im IM Ctag M 


Continued from Page 48 


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TOKYO - Moat Aetna Stoeks 
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NEW YORK ACTIVE STOCKS 

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Ladbroke 297 

Miller (Stanley) . 48 

Polly Peck 230 

Tyndall Hldgs ._I5Q 


Some business travellers 

will change neither hotel nor newspaper. 
That’s why they are particularly happy to 
find complimentary copies of the Financial 
Times at the following hotel in Grenoble : 
Mercure, 


Have vour F.T. 
hand delivered . . . 



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48 


0 Financial Times Friday November 6 1987 


NEW YORK STOCK EXCHANGE COMPOSITE CLOSING PRICES 


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GSU pB 
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HatnaCJO 1.1 5 41 27% 2ft » 7% 

10 m 387 W* WV WV +> 

■ 781 ft ft 8% -% 

4.13 70247% 45 46, -1, 

24 0 W 33 2ft “ li f 

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14 0 38 0 0 » +% 

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144 5% 

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264 14% M 14% +% 

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84 7 300 411* 39% «)% -% 

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7J0 1984 20% 19% a -V 

116 463 19% 1ft 19 +2 

140 15-0 V % +% 

11 8 200 SO W 07, +1 

17 3 405 21% 21% 21% 

1798 0 ft ft -V 

*100 74% 73 73 -ft 

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30% 30% 

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22% 22% +V 


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4J12 2217 2ft 29% 2ft +1, 
10 19 463 24% 23 24% +11, 

1.74 120 2ft '24% 2ft +% 

10 0 124 34% 33 34% +1 


M M 

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MBHa.n UI 
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MFM , J U 71fl 9% A A +V 

MFS Got.tt XL 3303 A A ft +% 

WO a 13* w% TO TO 

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•fMaiM 1 425 ft ft 2% ♦% 

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0 538 8 7% ft ♦% 

3 <22 TO 1 * TO TO -% 

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45 13 1838541, 52% 63% +% 

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Mean a 3A 1 J 0 1337 23 52% 23 + % 

Madttral JO 10. M 74 1ft 17% Tft -% 

MUhnlJi 1J 15 1305 78% TO 78 +2% 

MaMon 140 4J ‘ - ' 


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McOr pra m n. 
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SL S 


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17 28% M% 2A 

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II TO 65 S% - “ 

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1 330 ft 

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42 303 3ft 34% 35% 

0.8 202 15% 15% lft +% 

It IS 106 41% 40% 40% -1% 



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MotortaJM 14 72 7811 


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11 1632 17% TO 17% +2% 

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17 306 27 20 2ft +% 

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11 a 21 20% 21 

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305 2% A Z% +% 

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N N N 

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N8I ISO A 5% 5% +% 

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-NCMB . JB 8.* a ■ 164».0V 18% 1ft - 4 % 

: NOR nw 0r. 7065 68 61% 86 -»4 

NL lad -Wal4 883 A A A ♦% 
ML h0 IMS tft TO n -% 

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NWA JO 23 10 2681 40% 39% 30V +% 
Naocoa J2 148 2M 72 20% 21V +% 

Mated UO 3 J 17 1008 31% 30 31% +ft 

Namua 33 1.1 11 1073 a 25% 73 

HdCmr X U 185 ft 7% 7% 

NatObtZJD 15 9 1605 62% • to 62% +4*. 
Nartda 0 533 0% TO 0% 

MEM 93 72 2 ft IV “V 

NmFG bUO 15 10 92 1ft W% 1ft -% 
NR 251 9 90 0% 0% TO 7 , 

NX pf Sit 6 46% 45*3 «»: -% 

MMa dC 64 1321 4737 0% 1ft 1ft +*z 

NMXMS * 2% 4% 2% 

N^reatUO 43 0 » 277* 27% 2ft +% 
MSarnt 1907013% 0% W 

NOarapf 4 74 72 51% 4ft 51% +11 

MEerawi 953 ft 4% 4% 

MSvtns.64 12 13 608 80% 1ft 0V +1 
NStatoJOl 03 7% d 7% 7% -% 

NtWxt nL22a 42 9 324 » “ 

7024 ft 
445 ft 
Ml 1% 

12 17, 

32 0% 


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Naa alB 
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1L 1020 24 23% 2« +% 

*0082 61 82 — % 

0 24% 241* 24*, -V 


NVS pf 20 UL 20 21 20% 2ft +% 

Newell 84 12 11 2*3 2ft 2ft 2ft +1% 

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89 17 4 ft 6% 6V +% 

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It. *50 » 35 36 

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174 ft 3 5 

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2040 26V 26% 26*4 ~% 

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11 . 

11 . 

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NESv pQJS IV 0 72 21 21% -*I 
NoenUf.78 83 9 


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MndPSISe 1J 15 1549 9% ft 9% +<* 

NoStP0J2 84 0 2258 32% 3ft 3ft +14 

NSPvpMJB 19 2300 51 51 51 +1*s 

N3Pw pTOBO 92 £220 74 73 74 +4 

NSPw pf7J4 9.8 £200 82 82 02 +1 

NSPw pf 7 88 *10 73 0 73 +1 

NorTala 34 14 0 2528 17% XT 1ft +% 

Mh9«8 tW 4% 4% 4% -% 

Nortip »J0 3J21 202 31 30*4 3ft -V 

NMP pO50 BJ 24 25% 25% =% -V 

NwtP p038 9.8 18 24% 24% 24% -% 

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53 528 36V 37% S3 -1 

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.40. UT 721 23 2ft 2ft _ 

38 1 J 13 741 0% 341* 35% +1 

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NwNVti 503 ft ft ft +V 

NuvUunOSe J 1589 9 ft 9 +V 

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OOO 



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9.7 a 

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431 TO*, 

369 

968 27% 

998 

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11 

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11. 

moo 41% 

11 . 

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11 

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11 . 

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11. 

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42% «% -% 

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OtdeGB.18 73.. — = 

ouBGprao 11 i720 to ft ft -V 

Odfl 1J04JW 11703ft to 3ft +'8 
Omacra 399 A 6 

Continued from Page 4S 


78% TO +t 

2ft 2S% +V 
n n +’ 


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0 




»*»v 




Financial Times Friday November 6 1987 0 


49 


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Continued on Page 47 


t 


50 


FINANCIAL TIMES 


Financial Times Friday November 6 1987 



WORLD STOCK MARKETS 







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Rate fall primes Dow’s recovery Yen’s strength saps subdued Tokyo 


WALL STREET 


S & P 500 

(Composite Index) 


SPURRED BY Calling interest 
rates, Wall Street stock and 
bond prices rose strongly yes- 
terday, writes Roderick Oram in 
New York. 

Credit markets were bol- 
stered by confirmation from the 
Reagan Administration that it 
was driving down interest rates, 
even at the expense of a lower 
dollar, to help the domestic 
economy through the aftermath 
of the October stock market 
massacre. Bond prices rose 
about 1% points in active trad- 
ing. 

At 2pm the Dow Jones Indus- 
trial Average was up 46175 
points at 1,902.04, close to its 
highs for the session. Broader 
blue chip stock Indices were al- 
so ahead but secondary and 
over-the-counter stocks lagged 
behind. 

Among blue chips, General 
Motors added $1% to $60%, 
AT&T edged up $% to $29%, 
General Electric rose $2% to 
$46%, American Express gained 
$% to $25%, Eastman Kodak ad- 
ded $% to $51% and Coca-Cola 
advanced $1% to $41%. 

Banks were generally ahead 
in the wake of their prime rate 
cut to 8.75 per cent from 9 per 
cent because of lower borrow- 
ing costs. Citicorp rose $1 to 
$41%, J.P. Morgan added $4% to 
$36%, Manufacturers Hanover 
was up $% to $30, Chase Man- 
hattan rose $% to $29% and Se- 
curity Pacific was up $% to $30, 
although H awk Am erica dipped 
$%to$8% 



BBGEH3EEKS 

BaMESHE 

.mg* 

Aug 1987 


by major retailers’ October 
sales figures released yester- 
day. However, economists are 
still concerned that the crash 
could cause consumers to scale 
back their purchases which, in 
turn, could help trigger a reces- 
sion 

Walmart, with sales up 40 per 
cent, rose $1% to $28%, J.C. Pen- 
ney, up 9.1 per cent, gained $% 


to $44%, Zayre, ahead 17.3 per 
cent, put on $% to $22%, and K- 
mart rose $1% to $28%. Sears, 
Roebuck, the nation’s largest 
retailer gained $% to $35 % 
even though its sales rose only 1 
percent 

In the takeover arena. Telex 
gained $3% to $57%. The manu- 
facturer of computer peripheral 
equipment said it was consider- 
ing a restructuring to ward off a 
takeover bid from Mr Asher 
Edelman. the New York inves- 
tor. who yesterday extended his 
$65 a share offer. 

Among other takeover stocks, 
Saida Fe Southern Pacific 


Consumer spending remained 
strong immediately after the 
stock market crash, as indicated 


slipped $% to $54%, Singer ad- 
ded $% to $48% Kidde rose $% 
to $61% and Brockway slipped 
$%to$49% 

Texas Air edged up $% to 
$13% Its Eastern Airlines sub- 
sidiary, which was responsible 
for most of the parent compa- 
ny’s heavy third-quarter loss, 
reported a 5.2 per cent decline 
in traffic in October. 

In contrast, US Air, o£T $% to 
$32%, reported an increase in 
October traffic of nearly 15 per 
cent 

IBM added $2 to $121%. Mr 
John Akers, the computer 
group’s chairman, told analysts 
on Wednesday that he expected 
revenues to grow next year and, 
if the economy deteriorated, the 
company would take further 
steps to cut its costs. 

Other computer makers were 
also strongly ahead. Digital 
Equipment gained $3% to 
$135% Unisys rose $% to $31%, 
Apple advanced $1% to $37% 
and Hewlett Packard was up 
$l%to $49%. 

CBS added $1 to $172% Mr 
Fled Meyer, chief financial offi- 
cer of the television and enter- 
tainment group, said there was 
a 70 per cent chance it would 
sell its CBS Records division to 
Sony. American Depositary Re- 
ceipts of the Japanese consum- 
er electronics group rose $% to 


prime rate to 8.75 per cent from 
9 per cent 

Three-month Treasury bills 
were essentially unchanged at a 
bond equivalent yield of 5.66 
per cent, while short-term bank 
lending rates fell by between 15 
and 30 basis points in the wake 
of the reduction in prime rate. 

Credit markets were undis- 
turbed by the steady devalua- 
tion of the dollar, following 
comments from Reagan Admin- 
istration officials that they 
wanted the dollar to fall to help 
stave off a domestic recession. 

Market players were fairly op- 
timistic that the third and final 
leg of the Treasury’s quarterly 
refunding would go well, de- 
spite a relatively poor investor 
response to the first two legs 
and the dollar’s farther weak- 
ness. Events yesterday buoyed 
investors’ hopes that interest 
rates would all farther. More- 
over, only $4.75bn of 30-year 
bonds, less than half the normal 
volume, were offered yesterday 
by the Treasury because it is 
bumping up against its congres- 
sional borrowing limits. 


CANADA 


In the credit markets, bond 
prices jumped almost a point at 
the Wall Street opening, build- 
ing on overnight gains abroad. 
They rose further during the 
morning as the worldwide trend 
towards lower interest rates 


was reinforced by actions of the 
Bundesbank and other central 
banks and, on tile domestic 
front, by banks cutting the US 


SOME international interest 
rate cuts heartened operators 
in Toronto and provided a firm- 
er tone to the still dejected mar- 

The composite Index nar- 
rowed its losses after a poor 
start, encouraged by the cut in 
US prime rates, but resource 
stocks remained under pres- 
sure. 

Among casualties in golds 
and mines. Lac Minerals felli 
C$% to C$10% Hemlo Gold lost! 
C$l% to C$lff% 


EUROPE 


Bank moves offset by dollar fall 


MOVES TO cut interest rates in 
West Germany and Switzerland 
provided little consolation for 
dejected investors, still preoc- 
cupied with the dollar’s de- 
scent 

All markets ended lower and 
Swiss, Norwegian and Italian 
indices fell to lows fbr the year. 

ZURICH dropped to a year’s 
low as selling set in after the 
dollar slumped to a record low 
ofSFrL3880. 

The Credit Suisse index 
dipped 153 to 443.5 and the gen- 
eral index lost 17.4 to 495.1, also 
a 1987 low. 

Id transports. Swissair lost 
SFr55 to SFr855. In generally 
depressed banking issues. 
Swiss Bank Corp was down SFr8 
to SFr395- 

Enginee rings fell, with Saurer 
off SFr30 to SFr240 and Brown 
Bove ri do wn SFrtJO to SFr2,040. 

AMSTERDAM recovered from 
touching a year’s low earlier in 
the session but still closed 
down, despite a late rise on 
signs that West German and 
Dutch interest rates were about 
tofalL 

The ail-share index closed 0.4 
down at 65.3 but off lows 
reached in a response to over- 
night declines on Wall Street 
The weighted ANP-CBS index 
shed 0.9 to 238J2, but the midses- 
sion calculation did not reflect 
the late upswing in blue chips. 

These closed mainly higher, 
with Royal Dutch adding FI 3 to 
FI 204 and Unilever up FI 2 at 
FI 103.50. Philips was un- 
changed at FI 30.50 while .KLM 
fell FI 2.40 to FI 29.50 after an- 
nouncing a drop in second quar- 
ter profits. 

PARIS remained hesitant but 
managed to recover some 
ground after joint Franco-Ger- 
man moves on interest rates. 


LONDON 


TRADERS in London cautious- 
ly lifted their heads above the 
parapets yesterday as the 
moves to lower Interest rates 
in West Germany and the US' 
suggested a concerted attempt 
to stop the rot in world mar- 
kets, writes Terry Byland m 
London. 

With UK money markets also 
signalling that Tuesday’s half 
point cut in domestic base 
rates could soon be followed by 
another similar reduction, the 
stock market swung round by 
more than 66 index points after 
a weak start. The FT-SE 166 in- 
dex closed a net 30.7 higher at 
1,638,8, in its first positive per- 
formance this week. 

However, with the US dollar 

g limbing new lows In Europe, 
ty traders were restrained in 
their comments on the latest 
interest rate cats. The Ger- 
man move was Important,* said 
Mr Tim Congdon of Shearson 
Lehman's London office "It 
shows they are moderating 


their stand against cheap mon- 
ey. But the markets really want 
some stronger re-assurance 
about the US dollar,” 

The British government 
bond sector was disappointed 
that the West German authori- 
ties stopped short of cutting 
the discount rate, and bond 
prices t opped off as the locals 
in the LEFTS trading pits sold 
bond futures short 

Buying support for the equi- 
ty rally was held in check % a 
v i rttage of cash in the coffers 
of the big investment institu- 
tions. Liquidity ratios at the 
major funds are believed to be 
below 2 per cent of portfolio 
values, compared with an aver- 
age of around 3% per cent over 
the post four years. 

One burden was finally 
lifted from the market yester-' 
day when the Bank of England' 
confirmed its 70p a share sup-' 
port level for the new shares inj 
British Petroleum last week. ' 

The shares, which brushed' 
against the Bank’s support lev- 
el earlier this week, traded 
comfortably above it yesterday. 


‘ 16.44 to 27S3& The previous low 
of 28L27 was set early in Janu- 
ary this year. 

Volume was very low with on- 
ly sellers on the floor. Stocks 
were also hit by lower North 
Sea oil spot prices which edged 
below $18 a barrel. 

Norsk Hydro lost NKr450 to 
NKrl68 and Saga Petroleum 
sank NBR50to NKrlOR 


The CAC general index shed 
13.8 to 297.1 in moderate vol- 
ume. 


Leading blue chips ended off 
the day’s lows. Elf-Aquitaine 
was a net FFr8 down at FFr269 
from tiie day’s low of FFr260. 


Lafarge-Coppee was the only 
leading quality issue which con- 
tinued to fall in late trading, fin- 
ishing down FFr30 at FFr1,135. 


BRUSSELS moved lower in 
calm trading. Share prices fell 
sharply in early trading but par- 


tially recovered through the 
day. The Brussels cash market 
index was down 78.51 at 
3,766.18. 

In mixed holdings. Reserve - 
the share of Societe Generate 
de Belgique - ended with a 
BFrlO gain at BFr2,410, GBL 
lost BFrtO to BFI2.650 and Sofi- 
na declined BFx340 to BFr9,56Q. 

In chemicals, UCB fell BFT400 
to BFr7,600 and oil issue Petro- 
fina declined BFrlOO to 
BFr9,400. 

OSLO hit a low for the year as 
the all-share index dropped 


MILAN dropped to a new low 
for the year as a sharp foil in 
share prices sent the MIB index 
down 25 to 700. The previous 
low of 721 was set on October 29. 

Most issues continued to foil 
in after-hours trading. 

Fiat shed L275 to L8,725 or 3 
per cent Earlier, the group an- 
nounced it was pulling ont of a 
telecommunications venture 
with Italian state-owned compa- 
ny Stet off LW0 at I&500. 

MADRID edged lower in lack- 
lustre, thin trading. Investors 
grew more depressed about the 
outlook for international equi- 
ties and the modest rise at the 
opening slowly diminished. The 
general index slipped 0.65 to 
230.07. 

HELSINKI slipped lower In 
slow, quiet trading. The Unites 
all-share index lost L5 per cent 
to close at 597. 


Gloom shrouds German exporters 


EXPORTING, it would seem, is 
out of fashion with investors in 
West German stocks, writes Anr 
drew Fisher in Frankfurt. 

With the D-Mark irrepressible 
in its rise against the dollar and 
many European currencies, the 
outlook for companies heavily 
dependent on foreign sales has 
become a good deal murkier. 

After another slight fall yes- 
terday, the German stock mar- 
ket is nearly a third below the 
level at which it ended 1986. 
While Germany's bourses had 
lost their shine for some time 
after the surge up to'April last 
year, the recent shake-out has 
been more than enough for 
many investors, especially 
those who had piled in Grom 
abroad. 

Stocks of companies rebant 
-on exports, such as car and ma- 
chinery makers, have been par- 
ticularly heavily pounded since 


October 19. "The market is still 
vulnerable,* said Mr Reinhard 
Fischer, an analyst with Ban- 
que Paribas Capital Markets in 
London. 

The fact that yesterday’s in- 
terest rate moves by the Bun- 
desbank did not prevent a fur- 
ther fell in the US currency 
suggests that bourse conditions 
could worsen rather than recov- 
er, he felt. 

In the absence of develop- 
ments to soothe investors' bat- 
tered nerves, German stocks 
seem likely to drift at best or be 
driven down farther. Mr Ste- 
phen Reitman, motor industry 
analyst with Phillips and Drew, 
the UK stockbrokers owned by 
Schwelzerische Bankgesells- 
cbaft (US), commented: The 
dollar is the only game in town 
and you have to be very brave to 
call the floor on this market* 

The Commerzbank’s indices 


tell a grim story. Its total market 
index was yesterday at its low- 
est for the year at 1,396.6, down 
2 per cent from Wednesday and 
32 per cent this year. The motor 
sector index is nearly 40 per 
cent down, with engineerings 
losing nearly 30 per cent since 
December 3L The worsening fi- 
nancial environment has also 
hit banking (down 37 per cent) 
and insurances (down by half). 
Chemicals, with their broad 
product and geographical base, 
have suffered less, with a 12 per 
cent fall. 

While the motor industry has 
benefited from buoyant Europe- 
an markets, its smaller US busi- 
ness has suffered. However, as 
Mr Reitman points out, compa- 
nies had been adjusting to. 
tougher US conditions for some' 
time after the unexpectedly 
strong final quarter of last year. 

Most exposed to the US mar- 


ket and the weaker dollar is 
Porsche, a narrowly traded 
stock which ended last year at 
DM1,050 and yesterday closed 
atDMGlO. VW, in which the Gov- 
ernment has been forced to put 
off the sale of its minority stake 
yet again in the depressed mar- 
ket, ended the day at DM262 
against DM427 at the turn of the 
year. 


TOKYO 


THE YEN’S unabated strength 
against the dollar and foils on 
overseas stock markets pulled 
down share prices almost 
across the board in Tokyo yes- 
terday, writes Shdgeo Nisfdwdki 
afJiji Press. 

The Nikkei average closed 
43088 lower at 22,62065 after 
losing 549 at one stage. Volume 
shrank to 451m shares from 
Wednesday's 567m shares. 
Losses led gains by 790 to 142, 
with 95 Issues unchanged. 

The yen rose again in Tokyo, 
dampening investors’ buying 
enthusiasm. Many appeared to 
be awaiting price trends in New 
York and London and the out 
come of Thursday’s auction of 
30-year US Treasury bonds. 

Steels declined broadly. Nip- 


pon Steel dipped Y9 to Y428 
and topped the actives with 
38,13m shares changing hands, 
Kawasaki Steel fell Y4 to Y343. 
Nippon Kokan Y14 to Y345 and 
Sumitomo Metal Industries Y12 
to Y307. 

Large-capital shipbuildings, 
which fared well the previous 
day, turned down, with Mitsui 
Engineering and Shipb uilding 
shedding Y6 to Y287, Ishikawa- 
jima-Harima Heavy Industries 
Y24 to Y632 and Hitachi Zosen 
Y7 to Y228. Mitsui was the sec- 
ond busiest issue with 2335m 
shares traded. 

Tokyo Electric Power, active- 
ly sought on Wednesday on the 
strong yen and lower interest 
rates, finished YZ10 lower at 
Y 6,790. 

Among constructions, Taisei 
Corp. and Ohbayashi Corp. 
dropped Y10 each to Y 1,040 and 
Y1400 respectively, while Dai- 


wa House closed Y40 lower at 
YL78Q. 

Foods were dep r essed by 
profit-taking, with Nissin Food 
products losing Y210 to Y5300 
and Ajinomoto Y70 to Y3.430. 

Despite the yen's surge, some 
high-technology stocks tamed 
higher towards the dose. Hita- 
chi, with 1333m shares traded, 
rose Y20 to Y1O30. Fuji Photo 
Film gained Y10 to YIJIO and 
Sony Y20 to YR900. NEC fin- 
ished Y20 lower at YL800 after 
declining Y40 at one stage. 

Investors sold securities 
houses, fearfal of risks involved 
in their underwriting of BP 
shares for sale in Japan. Daiwa 
and Nomura Securities finished 
Y120 lower at Y2J60 and 
Y3A70, respectively. 

Bond prices firmed, spurred 
by the strong yen. 

In early trading; the yield on 
the benchmark 5.1 per cent gov- 


in West Germany. 

But the yield on the bench- 
mark issue later fell, mirroring 
the rising bond fixtures market, 
and ended the day at 4A55 per 
cent 

Osaka Securities Exchange 
prices continued falling with 
selling, triggered by the yen's 
rise, centring on electricals and 
steels. The OSE stock average 
finished 476.91 points lower at 
23,213.70, on an estimated vol- 
ume of 73m shares, a rise of 6m 
from Wednesday- 

Murata Manufacturing lost 
Y100 to Y24230 


AUSTRALIA 


HONG KONG 


SOUTH AFRICAN stocks fell 
bade again under heavy selling, 
with the composite Index losing 
7 per cent to L$82. making a 

two-day loss of 14 per cent 

Mines continued to be hard hit 
with Vaal Reefs and Soothvaal 
both off R15 to R275 and BJL44 re- 
spectively. De Beers shed RUB 
to R30, Amgold plunged R 23L 2 5 
to R264.75 and Rutenburg foil 
K2toR27. 

Industrials fared a little better 
with Barlow down 25 cento to 
IH and SA Breweries off R1 at 
Rl&JRL 


ermnent bond, due in June 1996, 
fell to 4.445 per cent from 4L560 
per cent at Wednesday’s dose. 
It rebounded to reach 4535 per 
cent, due mainly to anxieties 
about the planned US Treasury 
auction and Interest rate trends 


_ FOREIGN ^msti totiona j^sefi^ 

mood’ wasworsene<fb? the dol- 
lar’s weakness and losses on the 
Tokyo, London and New York 
markets. 

The Hang Seng index 
dropped below 2JOOO fbr the 
first time since September last 
year, losing 116L21, or 5.6 per 
cent to 1,96090. Turnover was a 
low HK$Llbn. 

The Cheung Kong group’s 
HK$10bn rights issue overhung 
the market with the rights trad- 
ing at a premium to the cash 
pri ce. Ch eung Kong lost 60 cents 
to HK$6.15 and its affiliate 
Hutchison Whampoa fell 15 
cents to HK$&80. 

Properties were badly affect- 
ed, with Hongkong Land down 
70 cents toHK$&83 and New 
World Development off 50 cents 
atHK$5-55. 

In Hang Seng index fixtures, 
the November contract lost 100 
more points to 1£10 and Decem- 
ber fell 70 to L940, with only 450 
contracts traded. 


THE UNSTEADY Australian 
dollar and farther gloom on 
overseas markets depressed 
Sydney share prices to a 13- 
month low. The All Ordinaries 
fell 3&9, or 3.1 per cent, to 
L2S0.4. 

Golds suffered wont in a 
broad sell-off. led by Sons of 
Gwalia’s A$1.70 tumble to 
A$7^a Metana fell 90 cents to 
A$7.50 l Easier commodity 
prices hit resources, with Peko 
off another 40 cents at A$5.40. 

Bell Resources tumbled 28 
cents to A$L30 as entrepreneur- 
ial issues lost favour. Adsleam 
lost 30 cents to AS5 and Elders 
1XL 10 cents to A$20 l 6D. News 
Corp dipped 40 cents to A$1G.50. 
FAI Insurances rose against the 
market by 35 cents to ASS on 
news it had sold its stake in UK 
merchant bank Hill Samuel. 
Banks eased slightly. 


SINGAPORE 


THE SHADOW of global mar- 
kets and the declining dollar 
continued to darken Singapore 
trading, with the Straits Times 
industrial index shedding 39.79 
to 817.72 in uneventful trading 
of 41m shares. 

The most active stocks were 
United Overseas Bank, off 24 
cents at S$4.74 on 2.9m shares, 
and DBS Land, down 4 cents at 
S$L16on 1.6m shares: 

Malaysian issues caught up 
with falls in Singapore follow- 
ing Wednesday’s holiday in Ku- 
ala Lumpur. Malayan Banking 
lost 18 cents to S$4.K> and Sime 
Darby fell Scents to S$L95. 



Notice to Account Holders 


STOCKHOLM picked itself off 
earlier lows to end 21 per cent 
down on the day after a 3 per 
cent fall by lunchtime. Foreign 
investors wound up their 
sell-off. but steady unloading 
was still evident from private 
investors. 

The Affoersvaerlden general 
index shed 145 to 682.L 
Dollar-sensitive issues con- 
tinued to suffer. Volvo shed 
SKrl2 to SKr270 and Saab 
dropped a further SKrlS to 
SKrl65u 


Gross Midland w 

■SS 1 Savings Accounts •flE* Jglm 

%pje. 


_ Gross 
Equivalent 
Net to a Bast 
interest Rate 


With effect from 5 November 1987 
the following nates will apply:- 


Looking ahead, the car groups 
have a financial and product re- 
silience which should see them 
through the worst Among engi- 
neering concerns, though, the 
mood has turned distinctly 
more pessimistic. Linde, a fa- 
vourite with some foreign insti- 
tutions, closed yesterday at 
DM500 compared with DM712 at 
end-1986. Without currency star- 
bility, the outlook for this and 
other sectors remains cloudy at 
best and stormy at worst 


a99 

Deposit Account 

aoo 

4.11 

631 

Griffin Savers/ 
Number One 

4.75 

651 

7.97 

8.24 

High Interest 
Cheque Account 
£2,000+ 
£10,000+ 

600 

620 

8.22 

649 

3.99 

698 

LIVESCash 

£20+ 

£100+ 

3.00 

4.50 

4.11 

616 

7.64 

Monthly Income 
Account £2,000+ 

575 

7.88 

697 

Premier Savings 
Account £5,000+ 

675 

9.25 

4.98 

631 

7.57 

Saver Plus 
£100+ 

£500+ 

£1,000+ 

675 

4.75 

570 

514 

651 

7.81 

698 

7.31 

Vector 

Vector Savings 

4.50 

550 

616 

7.53 

7.50 

&00 

Clients’ Premium 
Deposit Account 
£25,000-£99,999 
£100,000+ 

564 

602 

N/A 

N/A 


With effect from 4 December 1987 
3.99 Save and Borrow 3.00 4.11 


$ 1 ) Midland Bank 

■•••••• Midland Bank pic, 27 Poultry. London EC2P 2 BX 


Bank pic, 27 Poultry, London EC2P 2BX 







tr ‘ 4 ' s > v... 

— in-: 

‘‘A. 


Fin.-ifH-i.'iJ Ti/tirs Friday NWnihrr <> 1987 




ifi) 


d Tofc 


Privatised 
faces in an 
old picture 


Europe’s biggest employers 


AiiSTi 


•• , ‘-Its • 

: ■-'« ;v 

' ; : ;VA 




i , 

• - ' ;r 


nr ADMAN MCKS 

TO MANY In the world's finan- 
cial community, this year’s FT 
Top SOO rankings must resemble 
one of those school or college 
group photographs taken in the 
early summer of 1914. 

The companies valued most 
highly by Europe's investors are 
there in order, captured 1m* 
June at the height of their 
self-confidence and close to the 
peak of their market capitalisa- 
tion, their faces betraying no 
clue to the calamity lying just 
over the horizon. 

That the crash of world stock 
markets since October 16 has 
radically changed the financial 
environment is beyond doubt 
Owners of equities have seen a 
huge proportion of thei» invest- 
ments wiped out; borrowe rs of 
funds secured against shares 
have had to scale down their 
plans; and lenders themselves 


s-sqapcre 




The more liberal struc t ni e s 
that have evolved in virtually 
all European capital markets in 
recent yean have been placed 
under great strain, as have 
many individual securities 
fixup and financial companies. 
Another immediate, if not nec- 
essarily fatal, casnaMy could 
well be the evolving interna- 
tional equity market. . _ 

Not least, the losses inflicted 
on millions of new shareholders 
must have g i ven pause for 
thought to governments contem- 
plating p ri v atisati on of Anther 
lane state-owned corporations 
- the single development that 
has most changed the composi- 
tion of ttm FT 500 this year. 

Yet the e n v iron ment for com- 
panies outside the 
sector has not changed so obvi- 
ously for the worse because of 
the stock mark e t s' plunge, and 
need not do so unless the indus- 
trialised world suffers a severe 
recession or prolonged turbu- 
lence in the foreign exchange 
markets. 

Soane of the well-known feces 
in this year’s portrait are new to 
ft* rankings. British Gas, Pari- 
bas, TSB, St Gobain are only 


four of the biggest companies in 
which governments sold off con- 
trolling blocks of stock. . 

Not counting the privatised 
giants, there were relatively 
few startling changes at the top 
of the list: Shell seemed as un- 
assailable as ever in fim place; 
BP leap-frogged British Tele- 
com; while Palmier Benz, de- 
spite unaccustomed bad public- 
ity over 1 its top management 
changes, slid only two places. 
Glaxo, Unilever, Generali, id 
and Hanson Trust were some of 
the companies which, for their 
respective industries, remained 
the apples of European inves- 
tors’ eyes. 

Acquisition accounted for 
most of those which dropped 
out of the lists, though some 
whole sectors such as steelmak- 
ing continued their fell from fa- 
vour. A very few companies, 
such as Ferment s , the Swedish 
biotechnology group that 
soared to 270th place a year ago; 
went down in the flames of 
scandal. 

Almost by definition, a rank- 
ing of -European companies 
based on market capitalisation 
reflects not only investo r s’ per- 
ceptions of corporate perfiuv- 
manee. It also shows compa- 
nies* relative success in raising 
fresh equity finance in an era 
when the convent i onal wisdom 
in most of Europe has been to 
fevour shareholders over lend- 
ers as a-souree of fluids. 

From the top down, existing 
public companies in this year’s 
list have taken foil advantage of 
the markets’ confidence In them 
to raise large sums of additional 
capital through rights issues 
and - albeit to a lesser extent 
•Kan |n the US - spinning off 
parts of their business to share- 
holders as free-standing compa- 
nies. 

The powerful revival of the 
European stock markets’ role as 
providers of primary capital in 
such co untri es as Italy, France; 
West Germany or Finland has 
obviously been one of the key 
factors m their upward climb 


THE FT TOP 5M is a survey of Europe's 
biggest companies. This is foe sixth year in 
which it has bees conducted. 

Be main Bstlmhs at all publicly quoted 

^tty^xriDrio^^riie^ taken anm 
average for the mouth ef June this year and 
translated Into US dollars. 

A second list ranks the top 566 companies 

in the UK steck market, by fertile biggest 
In Europe. _ _ 

A co m p an y’s raptt s Hfa t l on is the number 
of it. shares multiplied by the Mice of Ha 
shares, and therefore measures the vatgeof 


It Is chosen is a yardstick because It has 
a number of advantages over other meth- 
ods. It is a good guide to performance ever 
Umtii it gives a p r o per weigh ting to banks, 
whsoc positions are distorted in fists based 
ua turnover, and it takes proper account sf 
lmwakiig companies which disappear 

from lists based mb profits. 


cauut ef these feetors, a separate list is in- 
cluded of the top 100 European concerns, 
whether publicly or privately owned, rank- 
ed by turnover. 

Hie Top 569 tobies analyse the key fig- 
ures on each company Included - turnover, 

profits, return on capital employed, and the 
nwuber of emp lo y e e s . 


shares, and therefore measures the 
a company in foe eyes of investors. 


to another, tt Is particularly I mportant In 
the UK, whereas in West Germany the 
k— w pixy a larger role In c o rp o ra te fl- 

anaee, and in Fkaaee and Italy many of the 

biggest groups are statoewadL To take an- 


other tables list the biggest employers, 
look at the moat profitable stock market 
■setters, and list the biggest profit I n cre a ses 
.and dec r e s sea. Throe is also a separate ta- 
ble ranking the top IN UK investment 
treats by market capitalisation. 


Per cen t a ge change June 1086 to June 1987 


[2Q 9 in US defers 


EUROPE 


Norway 


45.55 UK 
■H35.5 


mi-,1 


Bolglma 


Ireland 


Franco 




Switzerland 




msM 




Spain 


over the past five years. Yet al- 
ternative sources of long-term 
finance, notably that provided 
by banks and bond investors, 
have deeper traditions In many 
European countries which have 
by no means disappeared, tt 
Should be interesting over foe 
next year to watch whether the 
appetite of E uropea n compa- 
nies for equity financing is tem- 
porarily blunted by this au- 
tumn’s gyrations or even 
pp rm«n«>n* >y diminished. 

For all the recent havoc, how- 
ever, enormous momentum has 
built up behind the process of 
deregulation and liberalisation 
of financial markets. The Euro- 
pean CnnwwmHy it this |"QHtb 


due to consider proposals from 
the Brussels Commission for 
the p rogressive dismantling of 
remaining controls on 
whawg p and shortterm capi- 
tal movements. 

Once foe Community can 
agree on foe way forward, and 
pan dwHp i appropriate transi- 
tional safeguards for its weaker 
members, it will have moved a 
long way towards a frill 

reality of the <ih*th»i market 
for goods and services within 
the next fi ve y e a rs. 

For some industries, such as 
pharmaceuticals or commodity 
riiwniMlii, the MTtat has for 
long been not even a European 
but a worldwide one. Aeqnisi- 


HniMi, disposals, joint ventures 
and reshuffling of groups of 
businesses during foe 12 
months* pe rform ance reflected 
In this year’s FT BOO were once 
again conducted with an eye to 
competitors In the US and Ja- 
pan, no less than those In the 
European home market 
In some other industries, such 
as electrical engineering! date 
processing or motor vehiclces, 
European contenders remain so 
much smaller-on the . world 
scale than their US or Japanese 
rivals that it seems unlikely that 
all the present can sur- 
vive indefinitely, as indepen- 
dent entities; Hi* p ro c e ss of ra- 
tionalisation appears to have a 


Sweden 

23.11 Finland 

JBbSi mm 

Denmark 

17£9 Netherlands 

_JM=a 

W. Germany At|Bfr{a 

^■V -16.12 

✓ 23.49 


long way to got 

In a third group of Industries, 
such as telecommunications, 
defence equipment and even 
electronics, the protection by 
governments of national suppli- 
ers seems little dented, and may 
well prove capable in practice 
of withstanding foe Communi- 
ty's tofli ert umbitfaBi for many 
years. 

As in earlier years, the pro- 
cess of financial liberalisation 
by European Community gov- 
ernments led to mergers and ac- 
quisitions that stepped for be- 
yond the frontiers of 
Community countries. Europe's 
most merger h«Iii 

year- not yet reflected In foe FT 


Rank Company 

1 Siemens , — 

2 Philips 

3 Unilever pIc/NV 

4 Daimler Ben? 

5 BAT Industries 

6 Volkswagen— 

7 British Telcom — 

8 Flat 

9 Hoechst — 

U Peugeot — 

12 Nestle 

13 CGE 

14 Saint Gobain 

15 Royal Dutch/Shell 

16 Grand Metropolitan . 

17 BASF 

18 Electrolux . — 

19 Thyssen 

20 British Petroleum 

21 General Electric 

22 Imperial Chemical Industries. 

23 Lonrho — 

24 Mannesmann. 

25 Brown Boveri & Company .. — 

* Yearly average. 


Top 500 

Country Sector rank 
Ger 5 7 

Net 5 35 

NUK 25 6 

Ger 9 4 

UK 48 13 

Ger 9 43 

UK 47 3 

Its 9 9 

Ger 42 22 

Ger 42 17 

Fra 9 58 

Swt 25 11 

Fra 5 131 

Fra 43 100 

NUK 51 1 


t Year-end total. 


No. of 
employees 
363,000t 
344.2Q0T 
340,000* 
319,9651* 
305,360* 
281,718t 
236,461' 
230,293t 
181,176t 
173,0001* 

165.0001 
162,0781* 

149.0001 
242,351* 
138,000* 

131,493* 

131,4681* 

129,912* 

127,390* 

126,000* 

122,328* 

121,800* 

115,621* 

111,1341 

97,500* 


500 capitalisation by country 


UK 

West Germany — 
Switzerland 

France 

Netherlands/UK. 

Italy 

Sweden - — 

Belgium 


_ 547,154.9 Netherlands 

„ 193,080.1 Spain 

_ 115,1063 Finland 

. 97,653.4 Ireland 

80,601.9 Norway ...... 

_ 75,1533 Denmark^. 

,. 52,0333 Austria 

34,733.4 


$m 

32,922.9 

30,7673 

9,6603 

4,7183 

4,3073 

3,4313 

1,6333 


500 - has been that between 
Anea of Sweden and Brown- 
Boveri of Switzerland, to create 
one of foe world’s half-dozen 
biggest electrical engineering 

gyftqpy. 

As in past years, too, the US 
remained by fer foe most 
po w erf u l single magnet for ac- 
quisitive European companies. 
The almost total absence of dis- 
crimination against foreign bid- 
den for US companies (with the 
notable exception of defence 
contractors}, the ready access to 
finance «wl foe appeal of the 
huge domestic market were all 
among the factors which contin- 
ued to draw vast investment 
westward across the Atlantic. 

After several yean of rising 
European stock prices, the 
mergers and acquisitions busi- 
ness seemed to have taken on a 
certain maturity. Nearly every 


country has experienced at 
least one strongly contested 
takeover - the battle for Hero in 
Switzerland, the struggle for 
Kluwer in foe Netherlands, the 
international scramble for mar- 
ket share in industrial gases in 
France are just three examples. 

Tactics have often been rough 
by past standards. Family 
shareholders’ loyalties have 
seemed less certain in the face 
of dizzy prices on offer from 
predators. European institu- 
tional shareholders have like- 
wise seemed to feel less tied 
than in foe past by historical 
iiwta with managements and 
more willing to vote their stock 
aggressively. Companies in 
many countries that feel vulner- 
able to bidders have, for their 
part, been increasingly building 
up their defences. 


read 

between the lines: 



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II* 


$ exchange rates (June averages) 



Financial Times Friday November 6 1987 

man 


The basis for the lists 


European top 500 sector codes 


Currency 19 87 

Austrian Schilling 12.7831 

Belgian Franc 37.6818 

Danish Kroner 6.8457 

Finnish Markka 4.4187 

French Franc — 6.0728 

German Mark — L8186 

Irish Punt — 0.6789 

131534 


Italian Lira 

Netherlands Guilder — 2.0482 
Norwegian Kroner 6.7057 

Spanish Peseta . — 126261 

Swedish Kroner — — 63393 
Swiss Franc U508 
UK Sterling 0.6139 


1986 

15.6977 

45.6119 

82734 

52778 

70185 

22241 

0.7367 

1,53224 

25113 

7.6037 

142206 

72021 

123% 

06628 


96 

change 

22.8 

2L04 

2026 

19.44 

1722 

223 

831 

1637 

2231 

1339 

130 

1331 

23,99 

7.97 


1985 

2153a. 

61398 

10.9914 

63639 

93372 

3X163 

0.9783 

1,952.75 

3.453 

83172 

174.63 

83534 

25713 

0.7805 


□ Rankings 

The ran k in g s of the European 
and UK Top 500 tables are 
based «u market capitalisation 
at the end of June 1987. Prefer' 
ence capital has been excluded 

for this calculation. 

Companies that hare 70 per cent 
or more of theta* equity held by 

one other concern, or that have 
only a minimal proportion of 
their capital openly traded on 
the stock market, hare been ex- 
cluded from the list. 

The capitalisation figures have 
been obtained foam a variety of 


sources, iifcludfag Datastream 
International, local stock ex- 
changes, and the FT World Ac- 
tuaries Index. 

The ranking of companies hav- 
ing the same capitalisation has 
been determined by reference 
to their turnover or, where 

necessary, their profit. 

AH figures in the European ta- 
bles are expressed in dollars, 
using June average exchange 
rates. All figures in the UK ta- 
bles are in sterling. 

□ Accounts 

Consolidated accounts hive been 


used whenever possible. When 
parent company a c c ou nts ogfr 
have been reported, these fig- 
ures have been used and anno- 
tated. 

T urnov er Is shown net of sales 
taxes and inter-group sales. A 
ranking based on the latest 
year's figure is also given. 

Profit is disclosed profit b efo re 
tax and minority interest For 
the UK companies It is also be- 
fore extraordinary Items. 

Be t urn on capital employed 
(ROCEn* based on capital em- 
ployed at the beginning of the 


financial year divided by pre- 
tax profit plus interest. For 
hanks, capital employed ■ 

shareholders' fiEOds. 

□ UK tawtnw nt Trouts 

The rankings of the I nvestment 
Trust table are based on mar- 
ket capitalisation it tin; end of 

June 1987. The shkrdhoiden* 
funds figure la based m the 
ronbear of shares in tone and 

the stated net asset value, lids 
table has been compiled wbh 
the assistance of Wood Black- 


Code Description 

2 Bonding Materials 

3 Contracting 

4 Electricals 

5 Electronics _ 

6 Mechanical Eag&tejriHf 

8 Meta* and Mrtd Forming 
q Motors 

10 Other Industrial Materiqu 
22 Brewers and Dbtfltaf* 

25 Food Manofectaring 

26 Food Retailing 

27 Health A Household Prefects 

29 leisure 

31 Packaging Paper 

32 PobOsMog and Priming 

34 Stores 

35 Textiles 


Coda Descriptio* 

41 Agencies 

42 Chmkab 

43 coMBfemtam 

45 Shipping and Transport 

47 Telephone Networks 

48 Miscellaneous 
51 ou and Gas 
55 Utilities 

62 Baris 

65 tasarance (Ufo) 

66 tauwu (Composite) 

67 Insurance Broken 

68 Mwetemt Bento 

69 Property 

70 Other FwaneW 
81 Mining Finance 
91 Overseas Traders 


1-50 


MUM 


1987 1966 Company 


Cmh 


Stour kg 


“4 


ON year fajsffssf 
Sn 


dame MCE mriujau Yrar ad 


Rattles 

mw web 


Mart* 


Conreny 


1 

OJ 


NUK 

6X350-9 

51 

1 

72A083 

102J75J 

-269 

02B4.9 

15*602 

3*853 

2,9856 

-369 

156 

mooo 

31.1236 

3 

(3) 


UK 

27666* 

47 

22 

15*5X0 


123 

03676 

12-7 

22* 

236*61 

30J35JB? 

4 

5 

■ta 

(8) 


ficr 

UK 

25*06* 

196941 

Zk 

3 

148 

360107 

232M 

£3002 

24.9 

13 

01903 

9963 

631X9 

6363 

- 3 * 

516 

243 

992 

*319,965 

24,728 

3X1266 

300636 


Oil 


NUK 




2T/M3 

Z749L7 






340600 
















hx 

17*156 

17.727* 

15,*86X 

66 





XMjO 

Z30J 

326 

766 

1X4 





02) 

04) 



9 


202957 

205964 

17*703 

■ 83 
-04 



10 

Inewbl Cheated Indrsts. 

UK 

42 

18 

1*556 

X485* 

209 

72X800 

313236 


UD> 

(7) 

(16) 

(—) 

(A) 


SM 

15*3*3 

1*6818 

14*60.9 

14*32* 

12*151 

25 


NA 

267633 

X2J962 

Mt 

200007 

NA 

269567 

**84 

-9* 

113 

-16 



13 

86 

29* 

17* 

173 

226 

*143 



12 

13 

14 

15 

IMsn B«tt <4 SaftzertMd — . 

Soi 

62 

48 


7562 

2*693 

2*063 

5086 

69X9 

1*993 

X7916 

4336 


3UU6 

British Gas 

AMantMAv 

UK 

Co- 

51 

66 

26 

109 

NA 

80,469 

*28321 

•3U&B7 
n 15 m. 

16 

(9) 


Ger 

17.) I 1 1 

62 


Ml 

WR 


M7U 

lfS17aO 

-M 

*276 

*50*90 

313236 

18 

19 

20 

08) 

07) 

(23) 


UK 

TflfiiH.v 

ioxS* 

10232-7 



68704 

8*47* 

76209 

60867 

Si 

136 

7069 

595* 

X14L2 

4123 

183 

-4* 

83* 

287 

19* 

301 

66704 

92600 




S 


3X03*7 

306936 


UK 

43 

45 

6X2 

7556 

21 

05) 


Set 

Ger 

9*S2X 

9*076 

62 

42 

u 

NA 

0*02.9 

NA 

23*902 

NA 

26491* 

NA 

26222.9 

6321.2 

—316 

6226 

1765* 

1*466 

1*44* 

8223 

587* 

X735J 

1*097 

1*71* 

5893 

66 

17 

257 

-13* 

39* 

*127 

*1X775 

#18X176 

#131*68 

79*00 

313236 

3X1286 

314286 

23 

24 

25 

(27) 

NtUoBri Wtnmhnur On* - 

UK 

Ger 

8*4*5 

07296 

8*605 

62 

42 

9 

1416 

09) 

BTR __ 

UK 

10 

48 

6*476 

3* 

283 

3849*6 

26 

(22) 

(36) 

CraWSetec. ... 

5*1 

7*95* 

7*27.9 

833 

7*37* 

62 


NA 

01873 

NA 

12^9 

6104.9 

05613 

-123 

4563 

Z776 

5056 

30X2 

-9* 

-86 

*198 

63 

#1 4660 

*3X1736 



Set 

UK 

UK 





29 

30 

(30) 

(42) 

smremyj 

22 

26 

35 

49 

061*2 

6282.9 

-03 

12.9 

6209 

4822 

5657 

3169 

113 

283 

153 

28* 

131*93 

67*20 

3069*6 

91 in#* 

31 

1411 

03) 

(29) 

Veto— 

Ger 

67*2 

66(8* 

6472.7 

43 

27 

12 

226716 

4*473 

NA 

267226 

4^39* 

NA 

-17* 

X1307 

9369 

494,9 

X»03 

21* 

153 

6* 

200 

3X9 

365 

#69734 

3X1266 

33 


UK 

62 



XW.9 

180300 

313266 

34 

35 

OS) 

CM 

Prakadal ConnraUoa 

ran* 

Met 

6*94* 

6363* 

5 

5 

268709 

Nft 

29J16.0 

-63 

2901 

9883 

1793 

814.9 

617 

213 

NA 

8.9 

24*22 

«3H300 

1313266 

303286 

36 

(32) 

(31) 

Triefaates-— 

5m 

UK 

6*63* 

63364 

47 

47 

B4 

210 

3.706.7 

1*873 

3*606 

1*77* 

106 

06 

57X1 

5547 

4957 

4805 

153 

104 

96 

254 


3X2266 

316337 







Fra 

60247 

5*12* 

51 

14 

107153 

NA 

29,747* 

NA 

-307 

163&5 

9X4 

43573 

746 

-557 

23* 

26.9 

NA 

#76300 

NT* 

313286 

306636 

40 

(21) 

Mmcheav Rsduetstebtrams— 

Cer 

66 



41 

42 

(44) 

(53) 

am 



3*903 

66 







103 

13 

NA 

183 

123 

1X5 

153 



Banrircht Uotorao Went* 

Cor 

9 

9 

30 

06309 

296302 

5*44* 

3165X2 

9,940* 

20869* 

5*05* 

17*0* 

-61 

5861 

X0633 

5767 

1*264 

3508 

XS67* 

gfl iflnft 

110206 


iSSSZ?* 


5^449 

42 



22 

-502 



45 

iso 


Bd 

5*104 

51 

27 

-33* 

7797 

#22600 

313236 

46 

an 

GraM Unhmuri Sores — . ... 

UK 

M9M 

91 

as 

3*97* 

04476 

4,4169 

2*709 

02973 

&41£5 

82 

4019 

42538 

1443 

1401 

1*6 

193 

43*48 

316337 


(43) 






0*276 

0158.9 

X9353 

12 * 

Z4* 

505* 

1829 

5723 





49 

50 



Smma 

5 

138 

Kl9 

113 

109 



09) 


UK 

4*67.9 . 

22 

65 

326Z7 

•306966 


us am 
U7 can 

U 8 (2261 
in aw 
170 <-> 


Banco de Vbtaja. 


Campy 


Ini 


hri raw % tmjm 

Sra 


HadaHwQMM— a H — . 

HiUMkrea HaMMgi — — 

Britt* P it udp o U Com Cap 
TnrtHri.S -- 


SPA 

UK 

(IK 

UK 

BEL 


171 067) 

272 060) 

179 0881 

174 006) 

175 Q03> 


Rawrarae— 
Atarg Baric. 


GER 

5WE 

UK 

NET 

UK 


>ro»ti 

1,9746 

1,9647 

Wra.9 


62 

25 


32 

a 


151 

124 

294 

302 


mt 

23 a* 

£77X4 

752* 

■ tm* 


tm 
£i mi 
3JW9A 
431 * 
65U 


7* 

49.9 

741 

4A 


V 

BN ymr 

tm 

ftam 

MCE 

257 * 

37X9 

AU> 

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147.9 

1153 

202 

23.9 

89.4 

54* 

60 

24* 

3306 

4X5 

214.9 

3B.7 

185* 

2656 

12* 

la. 1 


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13971 

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1J67.9 

13641 


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42 


62 

34 


5Z3 

ltt 


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£610.9 
5751 
£1020 
WR 


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3,902 

Mt 

1.7231 


02 

71 

74 

M 


U31 

3361 


XBU> 


59.4 

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2291 

2t&* 

1891 


265 

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XV 

175 

115 


115 

113 

105 

615-1 

367 


. WA 

HN 

27.461 

12626 

fXMQ 


3X12.86 

5LUB6 

911226 

RUM 

•32*286 


176 Q9B) 

177 079) 

178 055) 

179 061) 

180 025) 


Kanudt. 

VEW 

Simla 


Socfrt* Can. 6a SanmUanca 


CER 

CER 

5WE 

BEL 

5WI 


181 056) 

182 063) 

las can 

184 

185 043) 


briW. 

Nokia. 


(-0 MzWhaMa.TJ(. 


UK 

SU 

FIN 

ITA 

SPA 


1544.9 

£8394 

15333 

15315 

15209 


34 

5S 

ta- 

rn 


51 

W 


247 


urn 

3508.9 

NA 

run 


5,923 2 
35502 
NA 
NA 


U 


M 


120 


5406 

2285 


iaoj 

2945 

204* 


2915 

322 

83* 

115 


7.9 
6 * 
*36 2 
A2X* 
39.9 


6X9252 

SK 


3112*6 

auai6 

"03.01*7 

31X2*6 

•0*94*7 


*60344 

§7*44 


3112*6 

3112*6 

3X12*6 

3312X6 

*3112*6 


15S* 

15090 

15867 

1J844 

3.7825 


186 059) 

187 cam 

188 (212) 

189 (296) 

190 029) 


Sditftoa ..... 

Tore (AsdcmazhnD. 


i^ nmm 88M 

HariarSMdtfcyGrare- 


cot 

rr* 

UK 

swi 

UK 


191 028) 

192 078) 

193 049) 

394 057) 

195 065) 


•MPV - 

Samdri A SoaM- 
Sedgridc Graft. 
Royal Baric off 


NET 

UK 

UK 

UK 

SW) 


17802 

W54.9 

1,7514 

1547* 

1,7333 


69 


HA 

NA 


803 


229 

64 

460 

3L12B. 

34 

72 

4*25* 

4385* 

OX ' 

922 

733 

a* 

97 

mm 

B4246 

5 

226 

2,7143 

2*9X0 

08 

165* 

1886 

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162 


3X1266 

70 

155 

2388* 

X9104 

143 

47,9 

200 

716 

103 


311266 

U 

217 

X375.7 

X2339 

1X4 

1913 

1606 

196 

96 

w* 

3X1266 


42 

66 

31 

41 

6 


134 

390 

sea 

331 


£7280 

3.7146 

3.708.9 

1594.9 


66 

41 

67 

61 

43 


25633 

HA 

2,7309 

mm 

25MJ 


2*02.9 -as 


m 

35*9* 


HA 


158 29 
9X0 
ISCJ 


355 

3365 

15 


134* 

1893 

-102 

9.0 

STS 

302 

246 

NA 

US* 

69* 

5X7 

29.7 

383 

103 

1702 

*9* 

2476 

26X3 

—XI 

143 


WO 21X2*6 
1259* 32-17*6 

6X940 3UU86 

40,500 3X12*6 


NA 

23»-7 

m 

HA 


59* 


7115 

1M2 

2207 

3005 


218* 

6X8 

2025 

270.9 


•)2 
735 
9 JO 
10.9 


76* 

395 

1265 

65 


§I3,7» 

*9774 

12.945 

ISUfiS 


196 073) 

197 oau 

198 cam 

199 cam 

200 076) 


Gram Bimetal 
Brawn Beret A Compare* 
Ciaaeeie 

Paired Rkwd— - 


NET 

1*472 

66 


NA 

NA 


1963 

1866 

5* 

NA 

0285 

BEL 

1*453 

70 


M/R 

HA 


305.9 

2272 

94* 

122.9 

WA 

SWI 

1*34* 

4 - 

32 

9368* 

930X6 

-03 

14X2 

1753 

-193 

4* 

97300 

UK 

1*30* 

29 

zn 

X370* 

1*49.9 

9* 

1505 

104.9 

43* 

2X9 

V>M 

FRA 

— ... 

22 

X96 

1*493 

1*023 

17* 

17X9 

1416 

246 

226 

10328 


3152*6 

300986 

3112*6 

3112*6 

-31*6*6 


31-12*6 

31X246 

31X246 

2709*6 

3X12*6 


201-250 


RmUbo 
1987 1986 

Cn irene 

Contnr 

opted 

3m 

Sector 

RMf 

nr 

tan ymr 
hi 


V 

Mini 

9m 

- 96 
doom 

MCE 

matter* 

meteww 

Yhrm 

201 (—3 

Kjnmm 

Flo 

1*25* 

31 

186 

1*0X2 

X905-9 

-53 

1746 

126.4 

STS 

163 

17,746 

3X1236 

202 (221) 

BaerHokSnp 

Sri 

1*12* 

62 

_ 

NA 

NA 


40* 

297 

STS 

8227 

8» 

9X1266 

205 (-) 

CmGemUSomd 

— Fra 

li.ll 7 

5 

322 

4787 

3625 

326 

52* 

304 

35.9 

563 

6*58 

3X12M 

204 (20U 

BunnabQn 

UK 

1*86* 

51 

159 

2359* 

0374* 

-93 

1725 

1297 

396 

n\ 

1X466 

313236 

205 am 

Ericsson LM _ 

— me 

X574J 

5 

71 

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5L2263 - 

-06 

175-9 

m* 

5 S3 

1ZJ 

72575 

3X7236 


51-100 


206 

207 

208 

209 

210 


(336) 

090 

077) 

(74) 

044) 


Lonrta . 


Victoria UObb-. 


UK 

UK 

FA 

Car 

Fra 


1569* 

3564.9 

£56X7 

£5534 


91 

42 

63 


189 

78 

165 


Z0SL? 
4018* 
2 10*3 
HA 

HA 


2589* 
4^12.7 
1*65* 
NA 
NA 


XV 

25 

9L2 


3085 

268.9 

1105 

685 


153* 

257.9 

14X9 

705 


10X2 

- 2 * 


2D* 

169 

14* 

NA 

13X7 


18*29 

D\621 

18,062 

3545 


31*3*7 

3009*6 

93)32*6 

3152*6 

3X12*6 


-Item 


19a7 l "* , ?986 

Cram 

Coontnr 

TT 

Sector 


nr 

r 

% 

mange . 

Kris year 
5m 

BN yew 
Sra 

% 

chmge 

ROCE 

mutter of 
preterm 

Year Ml 

51 

(47) 

AHM-UMS 

UK 

4*48* 

22 

S3 

5*883 

5*784 

94 

555* 

4396 

26* 

18* 

77*49 

076337 

52 

(49) 

Drestarflari— — 

Ger 

4,77X1 

62 


am 

WR 

-e- 

5736 

5162 

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6187 

#3*769 

3X1266 

» 

(54) 


UK 

4,747.7 

62 

— 

HA 

NA 


1340* 

9133 

247 

1364 

7X297 

3X1236 

54 

(87) 

Saab-Scanla 

S»» 

4*94* 

9 

58 

5*563 

5*226 

106 

5246 

457.9 

143 

236 

47*07 

3X12*6 

55 

170) 


UK 

4*336 

69 

— 

NA 

NA 

— 

1964 

183.9 

63 

67 

417 

3X1087 

56 

(51) 

rurUwkh 

Fra 

4*35.7 

10 

91 

3398* 

02776 

3* 

4303 

4143 

3.9 

230 

#25*00 

3X1236 

57 

(IDS) 


UK 

4*307 

45 

103 

Xiflo.o 

26546 

19* 

28X6 

204* 

386 

167 

’CSTSo 

3X1236 

58 

(lilt 


Fra 

4,423 3 

9 

16 

17*813 

16*15* 

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ti it at. 

59 

024) 


UK 

4^340 JB 

32 

104 

33773 

33456 

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306* 

2233 

36.9 

208 

34*00 

316367 

60 

(45) 

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43332 

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57 

5*606 

4*66* 

193 

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266 

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(65) 

Boots — — 

UK 

4 * 97 * 

34 

82 

3*303 

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395* 

3427 

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62 

(81) 

Uraten Hridtegs 

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4*693 

41 

S3 

1*11* 

7073 

436 

21X9 

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396 

577 

6*99 

3X1266 

63 

(63) 

RAS 

— Ha 

4*17.9 

66 


WR 

NA 


47* 

34* 

37* 

WR 

#3*77 

3X2366 

64 

(59) 


— Sri 

4*917 

6b 

— 

NA 

WR 

— 

200.9 

1713 

16.9 

WR 

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65 

(98) 

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=~ 3? . 

4JB7.4 

62 

— 

WR 

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— 

2W3 

187* 

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£266 

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320 

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172 

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253 

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3X1286 


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217 

218 

219 

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(207) 

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UK 


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UK 


15295 

152X7 

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15055 

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25 

tn 

42 

62 

2 


101 


3509* 

NA 

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NA 

2*609 



1091* 
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2D 


229 

230 


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66 (S3) 

67 (50) 

68 (48) 

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Fra 

Ha 

Nat 

UK 

UK 


73 

72 

73 

74 

75 


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4*19.4 

3,9686 

3,9207 

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5 

s 


54 

55 


5*667 
NA 
„ NA 
5*507 
NA 


3*502 

NA 

NA 

04655 


115 

7* 


(6X) 


UK 

32735 

34 

SO 

46*02 

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83 

>Si 

3)9* 

7043 

176 

196 

(38) 

QOS) 

(95) 

162) 

B5N Grape 

Spc 

Fra 

SfOM 

3,78X0 

9 

25 

60 

105 

19 

13*64* 

3*362 

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iSBfl* 

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SS& 

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186 

23 

12 

1*992 

2462 

2796 

8482 

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54* 

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226 

224 

76 

63 

RWE.’ W 

Ger 

3*496 

3*79.7 

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8262 


164* 

1716 

296 

f* 9 .™ 

3X1236 

231 

084) 

796 

7X6 

NA 

f3^717 

3X1236 

232 

mu 

4103 

X7 

WR 

7748 I 

tt n«r 

233 

(239) 

2132 

346 

25.7 

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234 

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6362 

NA 

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3X1286 

235 

096) 


iFmakria. 


UK 

S«t 

M 

UK 


1*575 

A*5M_ 


69 

45 


2 

70 


336 

MB 

157 


HA 

1*8X6 

3018* 

01825 


30208 

HA 

644X2 

NA 

2*215 


25 

-75 

1X7 


1705 

85 


1921 

1767 


134.9 

195 

131* 

188* 

129* 


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147 

148 

149 

150 




24M* 

£397* 

29 


£8760 

8*870 

3X5 

1MB 

7070 

3833 

258* 

2457 

1223 

571* 

357A 

999.0 

42X3 

34* 

23* 

77 

167 

-423 

1X9 

1347 

A190 

1X2 

65 

2X003 

67072 

67372 

47*23 

011*34 




UK 

62 


41 I7M 

tm 

(115) 

(80) 

tOgamom Butt Netterieri . . 

WUthead 

Net 

UK 

Gw 

£352* 

£31X7 

£89X5 

62 

22 

8 

136 

31 

WR 

£53X2 

9476* 

NA 

£497* 

10739* 

X3 

-74 

3X12*6 
mmip 
*1 renfc 


FOOTNOTES TO COMPANIES LISTED 


151-200 


RanUae 

1987 1986. 

Compere 

Country 

Marine 

■ff 

Sector 

Rari- 

tea 

— -Twrevei 

“ir “vr 

% 

ranee 

. — f" 

nr 

rift — 

V 

% 

dance 

ROCE 

Naotteref 

etrerira* 

151 

(141) 

Total 

nut 

£2850 

51 

a 

1576£4 

200074 

-44.7 

747 * 

£77X7 

-730 

1X6 

#4£2S3 

IV 

(152) 

niHymf 

UK 

£281* 

2 

SO 4 

LSH9 

£499* 

63 

212.9 

mi 

15* 

253 

2£366 


027) 


NET 

£25X9 

22 


37633 

3*2X7 

44 

2190 

201 0 

8.9 

134 

2X749 

154 

039) 


UK • 

27207 

34 

IBS 

Lsms 

£53X7 

177 

167* 

1277 

313 

484 

!£130 

155 

(237) 

Rayah Beige — . .. — 

BEL 

£203.7 

66 

— 

NA 

NA 

— 

400.7 

109* 


NA 

5078 


046) 

Unhid Bhnrits 

UK 

£18X2 

25 

115 

£9620 

£9423 

0* 

203.9 

16X5 

223 

23* 

59,952 

157 

030) 


FRA 

£173* 

34 

35 

Mre* 

70733 

1X5 

U9* 

187* 

174 

2X7 

£*£ 

158 

159 





6' 

70 


4*12,9 

Z84 

296* 



12* 

75,480 

(861 


GER 

£1170 

8 

15 

17094* 

19*2X9 

-00 

41X0 

5993 

-307 

87 

1^3* 

160 

082) 


UK 

£0010 

2 

188 

1*98* 

£5419 

15.9 

20X9 

1904 

8* 

1X5 

17346 


(117) 


UK 

20580 

62 

— 

NA 

HA 

— 

413* 

43X4 

-57 

1513 

5017 


(1741 

Andrew & MtmcheMf Betti* 

GER 

2032J 

6b 

— ■ 

NA 

NA 

— 

2X9 

257 

£7 

NA 

WA 


(203) 

CooteonGrare 

UK 

£02X7 

10 

• 242 

10964 

923* 

1X7 

15X9 

110* 

393 

2X7 

X314 

164 

(138) 

SwteVoOSbank 

SWI 

£02X3 

62 

— 

NA 

NA 

— 

1040 

8X5 

207 

A1Q.9 

#5066 

165 

asm 

BsaaEreeMrideCmfto 

SPA 

£0213 

62 

— 

NA 

WR 

— 

00 

17X6 

— 

WA 

17353*6 


Yt»r end 


31X266 

28*357 

3X1266 

306467 

•3X1226 

" 555 " 

31.1286 

3X1286 

306966 

31X266 


51X266 

93.1766 

3X3786 

•3X1266 

*3X1266 


t=ROCE crioKated on capital empioytd at yeareod. t-BOCE akuirted a* itorefcoMerS* Rails. &»ROCE gmcuWa) on daret wld erf fundi after ctogtog hawm ow taw cirtW not 
stated separately. Employees at year-eraX (K Parent rj a npan y ac wraits . 1«Pre*tow year's figures xqnsted ta- accnmUng donges. **See footnotes. 

8 BanaraN CAmtemnlealX profit Is nac of tax. 14 British Sm, Stack Exchange 
168*9 1*66 27 Rocha Braop, profit lx net of tax. 28 Ctta-Balpy. profit h net of tax. 

42 BayeriKlM Motaran Wertca, tu m a mr m or lriwtde coosolMatlon, profit — domestic 
consolidation. 44 Smdu, profit Is net of tax. SO Bo ltin , thh year's figures are for 
23 months to 3X02/86. 49 Teaca Stores (HeMtof*). this year's figures are for S3 
weeks to 28/2/87. 74 Noe Croup, profit Is after excapUenal dorse ri SZOtUhn (nil) 
ta carbon assets write-down. 76 Parihaa, Stack Exchange listbig 3/87. 82 TS* 
aronp, Stacie Exchange listing 9/86. 96 Inttreaa, Profit la net of lax. 100 Saint 
fiabata. Stock Exchange listing 12/86X04 *— mm (Aaatcorazlaai), profit is net of 
tax. 106 Coats VlyaBa, (Ms yew's figures are tar 13 montla u 3 V12/86. 116 SreHh A 
He ptra w *a— ctataa,thh year*a figures are tar 53 wfki to 3/1/B7. 123 Ra Ha -Hoy L a, 

Stock Exchange listing 5/87. 131 CUE, Compagnle Generate tTEtactricta, Stock 
Exchange iWng 5/87. 134 MocMfcnemy, empfeyees— 1985 year-and. 135 SAX 
profit Is net of tax. 140 Cariboo Srhw*.ppar, this year's flyirec are for S3 weeks. 141 
Commercial (Moo, previous year's profit excludes S960tn special us claims 
provblan. 144 British Airways, Stock Exchange IWirtg 2/07. 155 Rayalg Beige 
firaupe, irew group structure IncuhxUno tall acqiibitlan of IPPA means that this year's 
and lost year's figures are not comparable. 156 tlnfhed Ubcatts, Uds year's figures are 
ta 53 weeks to 3/1/87. 170 Traetabei, compare fanned through merger between 
Tractlonal and Etaetrebel, 1986 figures are based on sum of accounts of the two 
companies with reservation of reconstruction or original acquisition value. 173 
Rewotme, this year's figures are for 53 wccfcsXo 3/1/87. 175 Stnrahamw. this year's 
figures are for 53 weeks to 4/4/87. 1M Se al e t a B e n ira te da Tmiitn—i e. ROCE 


cxpltai employed after charging Interest on Iona capftnj. 19S Electrowxtt. 

| taest a mllxlrie ncconitts, ereplayeM— 1985 yevHmd. 215 Amm, Company formed 
£l 0, ’ Bh Auto * )boR 4 W** 1 " MoWlns. tJVT; eccouno xre for Aatophon 

■ “ 3 _ 1 9 ;2/b& 5 ngwes tar Hasler are: turnover— S515.7m tsm.OioS, profit— 

: B15Jan (513JlnQ for ye» to 31/12/85. 223 Bwrala Ocelriaatala, change la scene of 

« xnolldMi on means that this year's and last year's figures are not comparable. 22 S 
' ’OSlZL*?*’ roce b,,s « , «h «wt PriHH after charging ImereM on 

lMII ?. c y ”*?y*MtarHOCE based on capital employed after charging interest on loxa 
* HewcaxMe Brewer Its, tWsygar^t figures are for 53 weeks 10 
' -W7. 2U T. 6 fo rmer tf Turner A NnntL 2U Ultramar, figures are net for 
.discontinued operations. 277 Unerg, profit Is net of tax. 280 Petri tr, Sibki, this 
yearisngures ere talS months to 31/12/86. 282 BovyguM, change In scope of 

■ comaOdatton mean* that tub year's and last year's figures are not conyarihli. 

> 286 S.G. Warburg BraapiFormeriy Mercury Internatiastai. 294 Nertbera Foods, 

| Figures prepared In accorda n ce with merger accounting principles. ROCE bated on 
: capital employed assuming merger wtth M a y hew Foods effective at beginning of year. 
1298 Cater 6ro<tp, Formed through demerger of Imperial Continental Gas Association 
4/87. Accounts are pro-forma as if group had existed for the whole accounting period. 
,301 Havas, Agence, ROCE bated on pre-tax after charging interest on loan capita). 
|3B4 CrotfitansiaH B anhv ra l e, Profit is net of tax. 303 Baaque Brwitfla* LamtrarX 
IProflt is net of tax. 323 Mum Banco Ambreslmo, Last year's figures are for 6 

Coatimed oa mat page 


'T'\ 










Financial Times Friday November 6 1987 

euRore 




'll! 


S3U HwMM nwm) Rn 

QW Fra 

*»* . - ■■■ _ - Net 

CM3> niiir—mi m^niiia a» 

Q4W BBMueBr«Ml« LiMbtTt M. 

Car 







[!;-::|5c2 



g g 


fl4,8*J 31 

4*048 *31JZ8b 

13/478 3L0387 






B 








r t 


cowpny by capifatte^Iloti 


CntbnadllrMivnfiHipiiB 

'months to 91/12/85. 318 Campania EspaaoJa 8a Pitraim, Employees - 1983 year- 
end 324 Balaian Insurance Group, Profit “ group net profit. Employees ■ 1965 
jearend. 328 SMH, roce based on pre-tax profit -*■ net Interest. 342 Credit 
Commercial de France, Stock Exchange listing 4/87. 343 Bag Mu-Say, Change in 
scope of consolidation means that this year's and last year's figures are not comparable. 
344 Slmco-Ualen pour I'Habltatlon, Profit Is net of lax. 357 Hurls Queensway 
Group, Previous year's figures aro for 13 months to 26/1/B6. 380 Landis G Gyr, Profit 
Is net of tax. 374 JafmoH, Profit Is nsl of tax. 378 Martry, Figures prepared h 
accordance with merger accounting principles. ROCE based on capital employed 
assuming merger with Thermal lie Holdings effective at beginning of year. 399 HOT 
•Samuel Group, Profit Is before tax and after transfer to contingent banking reserve. 
408 Mi Europe, Stock Exchange Usilng 11/86- 419 Sutzar, Profit Is net of tax. 420 
■a m mei A M but, ROCE based on pre-tax profit ■+■ net interest. 421 Contlbal 
HokMogs, Formed through de-merger of Imperial Continental Gas Association d/87. 
This year's figures aro far nine months to 31/12/86. 424 R atneis Group, Tips year's 
figures art lor 43 weeks to 31/1/87. 442 Globus, Profit Is net of tax. 446 APV Baker, 
Merger of APV Holdings and Baker Perkins 3/87. 452 Altana. T ur nover— worldwide 
consolidation, profit— domestic consolidation. 454 Interdtsceunt, Profit Is net of tax. 
4*5 Coflda, Profit is net of tax. 469 Horten, TWs year's figures are for 10 months to 
31/12/86. ROCE annualised. Merlin- Garin, ROCE based on pre-tax profit ■+■ net 
Interest 484 Dragadn* * Manchester Group, ROCE based on —i*" 1 employed after 
charging Interest on loan capital. 485 London & Manchester Group, Profit Is net of 
tax. 488 O s tar rol chlscha Landerbank, Profit Is net of ux. 




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Financial Times Friday November 6 1967 


^uianad^h 


Seaq has helped fund managers take a European view, says Barry Riley 


Bourses respond to London threat 


Is there a global equities market? Alexander 
Nlcoll on the implications of Black October 

No place like home 


BIG BANG in terms of UK do- 
mestic equities happened a 
year ago, on October 27, 1986, 
bat another revolution in the 
London equity market has been 
taking place, albeit more gradu- 
ally. 

While the domestic market 
has hogged the headlines, the 
London market in foreign equi- 
ties, through Seaq Internation- 
al, has been making rapid prog- 
ress. This is a parallel market 
operated through the London 
Stock Exchange, but not con- 
fined to London member firms. 

Seaq International has now 
developed into an active insti- 
tutional market in leading 
stocks from many countries. Al- 
though figures are none too 
easy to come by, London is 
thought to account for a signifi- 
cant proportion of the overall 
trading in French, German, 
Dutch and Scandinavian stocks. 

It has therefore become con- 
siderably easier for fund man- 
agers to take a Europe-wide 
view of their investment oppor- 
tunities, at least when they axe 
happy to concentrate on high 
capitalisation stocks. By and 
large, small company stocks 
still have to be tracked down in 
their domestic markets. 

Japanese, American and Aus- 
tralian stocks are quite actively 
traded on Seaq International, 
but this business is largely done 
for time zone reasons. 

A market in such stocks is be- 
ing maintained in London tor 
the convenience of European 


investors while the markets in, 
tor instance. Tokyo or New York 
are closed. As soon as New York 
opens, at 2B0pm London time, 
trading in US equities is 
switched across the Atlan t ic. 
Head on, London cannot com- 
pete with the efficiency and li- 
quidity of the New York Stock 
Exchange in trading US equi- 
ties. 

The logic behind trading Eu- 
ropean equities in London is 
quite different. It is that a dis- 
tinctive, and in some respects 
better, market can be main- 
tained, suitable tor the intema- 
ti onaJly-oriented Lost] tnti on 
which can access a screen- 
based quotation system and 
deal in a well-developed tele- 
phone market 

The institutional nature of 
Seaq International is shown by 
the fact that the average trans- 
action size is £120,000, as op- 
posed to just £24j000 in UK do- 
mestic equity trading, where 
private investors are active. 

London's international equity 
market therefore thrives on the 
basis that it offers firm prices in 
much larger size than can be 
obtained in most domestic mar- 
kets on the continent 

It also has to be said that, in 
some cases, London gains busi- 
ness through offering a way 
around stiff transaction taxes in 
markets like those of Germany 
and Sweden. 

Overall, it is said, London 
turnover in French stocks rep- 
resents a seventh of that in Par- 


is: and, while London a ities readily available, but re- fcional investor it is a question of UNTIL THE Black October of more than this. Over the pest (transaction costa and delays m- 

rather lower proportion of search is also becoming better being first in and firftouL .1887, the equities markets were two years, investment banks volved In international dealing 

Dutch equity trading than that, developed. Firms like Savory These fringe markets may becoming global. They may still have poured a considerable can outweigh, or least severe* 

it is worth notingthat in the are now producing ns- have been lively recently, but be. But there is no doubt that amount of capital and energy ly curtail, the profits that can be 

cases of the very biggest Dutch sesw.ft on a Europe-wide scale the main continental equity the sudden collapse of stock Into internationalising equity made. 

n M <>i j tt.: w cimnlv on a national markets have generally had a markets irotmd the world, wiis gre ate r Thnmm much was made or se- 


er NY, London can general 
volume of between 40 and ' 
per cent of that in Amsterdam. 
Not surprisingly, continent) 


basis. 

This will make even greater 


dull time in 1987 soar. 

While the Far East markets 


OCUib ww J lttlVC U HUH/ inis** — — 

a ^ , , increasingly merge to tare aa- us has been solidly st r o n g and 

bourses are fighting back vantage of Community-wide op- uk has sparkled, bat the 
against London's threat. Paris is portunities. This has been hap- continental bourses have strug- 


block trading market for the in-' throughout the list 


stocks. Royal Dutch and Unilev- rather than simply on a national markets have generally had a market* around the world, with H y r * * ** - encouraging gr e at e r Though much was made of ae- 

.rate frfTPT dull time in 1987 so «r. still unknown effects on the distribution and trading of entities bouses supposedly 

d 5a This will make even greater while the Far East markets world economy, has dealt a se- shares outside the home conn- passing their trading boob 

im 1 sense as European companies nave mostly been buoyant, the vere Mow towards the develop- tzy of the issuer. arrowl the world from time 

>ntal incre asingly merge to take ad- us W" solidly strong and nient of the new market pla ce. There were many reasons tor cone. to time cone, this does not 

back vantage of Community-wide op- the UK has sparkled, bat the j Da one sense, the collapse fostering such a market With seem to have happened to any 

ris is portunities. This has been hap- continental bourses have strug- demonstrated how global the stock markets going np around great extent 
tang, pening in electronics and xn Germany, for instance, markets are- Each tended to (be world, fond managers in- Is arranging new issues, in- 
king consumer durables, it is company profits fell in 1906 and take its cue from the previous czmuingly - amid tougher com- vestment banks have ran into 

tajor starting to happen in financials, timely to be more or less un- time zone. If Japan was down, petition among themselves - the big differences between 

no a and logically it will spread chanced in 1987. With the cur- the likelihood was that London looked outside their home methods in domestic markets. 


going through its own Big Bang- pening in electronics aim. giecL In Germany, for instance, manww are. Each tended to 
type restructuring, with broking consumer durables, it is company profits toll in 3906 and take its cue from the previous 
firms selling out to the major starting to happen in financials, are jikety to be more or less un- time zomt IT Japan was down, 
banks, Amsterdam has set np a and logically it will spread changed in 3987. With the cur- tiie likelihood urns that London 


outside 


fax domestic markets. 


renqy strong and the Govern- would open lower. If it did, (he country for profitable invest- They have developed contrast- 


taking 


very! likelihood was that Wall Street " yr * y The dollar’s fall, tor ex 


stitutions, and the Germans are The risk in the past has been raent still t akin g a very tixetihooa was that wall street meats. The dollar’s feu. tor ex- 

trying to integrate their frag- that national markets might di- conservative fiscal stance, the would do the same. The 33 per ample, meant that US investors 

mented regional markets. But verge from each other, introdu- outlook is unexciting. “Jt faUof Hong Kong stocks in could make big gains by putting 

these measures take time, and ^ extra risks which tond The French economy has also tt j2E225£ffeS& 


these measures take time, and „iwg extra risks which fond 


London has a head start 
According to a Sto 


ing. and fiercely competing, 
str u ct u re s for arranging new is- 
sues. Thls bas underlined the 
experimental nature of the mar- 


managers were reluctant to con- rabiuaL and Ifaeeuuitv °S gr ^ Investment banks wanted the tart. Differing levels of suceeaz 

£r«f£ith. But the sheer welaht ties, even though the direct _cf- market partly because it was a in achieving International 


uvereeas equities in lduuuu ing to Increase me correlation 

typically amounts to £lbn a day, atleast for the bigger markets, 
against perhaps £L5bn in do- _ thiB not anol _ =_ , 


Cne reason for this is clearly raitog”fii '^“profitable. iz^thisis^owbacr. The stated 
reSverv^* 4 f 3lgnificant the development of tdecommu- Therewere for bigger profits to purpose of aU the different hs- 
“aJJfE ^th^vear markets n * 0V8X7 ' mentions and information ser- be had in equities, because the suing techniques is designed to 


partly because it was a in achieving international 
way tor them to expand, placement of new issues have 

tly because the interna- also attested to this. 

tional bond business was be- The main criterion for judg- 


matic equities. But only about thVthirS r^-oUrv 

.third of the trading of foreign ““2“ 


Of this London business m f h^? September low. Political uncer- world. There were also arguments 

foreign equities, European £S™SK ^SS^iSSilifL^S tainty has held the market back. Not only do individual mar- for issuers. Companies 

stocks accounted for almost half when local liquidity is but underlying corporate earn- kets display kneed erk reactions couraged to believe th 

in the first six months of this ings growth is good, and share (to the latest news, but they do so in their interests to 


dk4A.n4 OLVVniilHAl AVI niHIW V ... 

in the first six months of this cmn - 


investors take a quick turn. 

There have been a number of 
eases of this. Japanese inves- 


year. French stocks contributed The more a dven t uro us fluid prices could respond positively 
14 per cent of total turnover, managers are persuaded to ride to an improvement in the politi- 
GeTmany 13 per cent, other Eu- the booms in these smaller mar- cal c l i m a t e. 


to display kneejerk reactions couraged to believe that It was cases oT this. Japanese inves- 
the latest news, but they do so in their interests to broaden tors, tor example, have not aJ- 
infozmation coming from all their shareholder base globally, ways been firm holders of for- 
untries. Moreover, they tend This would diversity J ho ir togs shares bought when 
show the same kneejerk reac- sources of fending and help companies are listed in Tokyo. 


bought 

listedii 


it when 
in Tokyo. 


ropean Community stocks 14 kets, bat the problem is always The general problem tor Eu- 1 Eton. This is one reason for the them to finance capital invest- Conversely, Japanese com pa- 


per cent and non-Community how to get out again. No doubt rope is the impression that it _ 

stocks, chiefly Scandinavians, the local investors will be po- has lost its thirst for growth, at ptock markets now being seen. it would also, it was aq 

another 9 per cent teatial buyers but only at much least compared with the Farr The development of a global somewhat less plausibly. , 

Not only are the trading focil- lower prices. For the interna- East 1 market, however, means much multinational companies 


ter magnitude of moves in meat abroad, 
k markets now being seen. It would also, it was 


Europe’s top 
hundred 


Departures from the List 


Company 


Country 


by turnover 


Raridna 

Turnover 



Year 

This 

Last Conpany 

$m 

Cntry 

Sector 

end 

1 

(1) Royal Dutch/Shell 

72,008.5 

NUK 

51 

3102.86 

2 

(2) British Petroleum 

44,259.77 

UK 

51 

310236 

3 

(11) Daimler-Benz 

36,015.7 

Ger 

9 

310236 

4 

(3) IRI 

35,7750 

Ita 

43 

310236 

5 

(10) Vollswagen. 

29^)302 

Ger 

9 

310236 

6 

(6) Uni lever NV/pIc 

27,919.9 

NUK 

25 

310236 

7 

(15) Deutsche Bundespost~. 

27,296.2 

Ger 

55 

310236 

8 - 

. (9) Philips 

26,870.9 

Net 

5 

3102.86 

9 

Q4) BAT Industries 

26,7633 

UKt 

48 

310236 

10 

(7) Siemens 

25,856.7 

Ger 

5 • 

30.0936 

11 

(4) ENI 

25,5603 

Ita 

51 

310236 

12 

(121 Nestle „. 

25^320 

Svrf 

25 

310236 

13 

(16) BASF 

23/.903 

Ger 

42 

31.1236 

14 

(17) Bayer 

22,406^ 

Ger 

42 

31.12.86 

15 

(19) Rat 

22)295.7 

Ita 

9 

31.1236 

16 

(13) Veto 

22J371.0 

Ger 

43 

310236 

17 

(21) Electrldte de France ~ 

22,041.0 

Fra 

55 

310236 

18 

(18) Hoechst 

20,902.9 

Ger 

42 

31.1236 

19 

(20) Renault . 

20A413 

Fra 

9 

310236 

20 

(5) Elf Aquitaine 

19,7153 

Fra 

51 

310236 

21 

(22) Electricity Council 

18,312.1 

UK 

55 

31-03 37 

22 

(24) Thyssen 

173943 

Ger 

8 

30-09.86 

23 

(26) Peugeot ....... — 

17,2813 

Ger 

8 

303936 

24 

(23) Imp. Chemical inds. — 

16,510.8 

UK 

42 

310236 

25 

(28) RWE 

15,8303 

Ger 

55 

30.0636 

26 

(35) Berlsford S & W 

15,7933 

UK 

25 

303936 

27 

(8) Total. 

15,762.4 

Fra 

51 

310236 

28 

(29) British Telecom „ 

1535L0 

UK 

47 

313337 

29 

Gl) Deutschen Bundeshahn . 

14,9743 

Ger 

45 

310236 

30 

(32) INI 

13,6980 

Spa 

43 

310236 

31 

(39) CGE - 

133223 

Fra 

55 

310236 

32 

(33) Volvo - . 

13,264.9 

Swe 

9 

31.1236 

33 

(30) OIAG - 

13,0910 

Aus 

n 

310236 

34 

(44) Saint Gobain 

12,7983 

Fra 

43 

310236 

35 

(36) British Gas 

12,3962 

UK 

51 

313337 

36 

(43) Bosch, Robert 

11,9423 

Ger 

5 

310236 

37 

(38) uhrifole 

11,5050 

Ger 

55 

31.1236 

38 

(27) Gasunie (Nederlandse) . 

11,4783 

Net 

51 

31.1236 


Lech-Bectrizltatswerke 

Laird Group 

Foseco Mlnsep — — 

Prhratbanken — - — 

Be jam Group .............. 

Den Norsk* Cred (thank 

FTnextd 

Northern Engineering Industries 

Perstorp — 

Fortoo — 

Babcock International — 

Gneenall Whitley & Company - 

Mercantile House Hokffngs^ 

U.I.S 

Ratgerswerke — 

Lindt & Sprung li - .. 

Guinness Peat Group 

Schraders — 

Kolniscbe Ruckversicherung 

Dortmunder Unjon-Schuititeis B w 

Lalng (John) ...— 

VG Instruments.. 

Bowtborpe Holdings........................ 

Oxford Instruments Group 

Pravlnsbanken - 

Mowiem (John) 

PWA 

Bail I nvestissement ..................... . _ 

Harpener 

Rheinmetall — — — ■ 

Hoizmann Philip — ■ 

Veuve Clicquot - ; 

Mapfre Grupo Asegurador 

FECSA 

K KB Bank 


Papyrus 

Hoesdi — — ..... 

SabaJS 

Salpem ... — .... 

Clndu — Key & Kramer .. 

Centrale Sulk er„: , 

Union Credit pour le Bailment — 

Fermenta — ... — 

Hoogovens 

Nordwestdeutschc Kraftwerke _ 
Imp Continental Gas Association. 

Exco International . 

Electrobei — ............... 

Tractkmei................ - 

European Ferries 

Grattan — — 

Finnish Sugar Company 

AE 


Ger 

(460) 

22 

UK 

(458) 

3 

UK 

(455) 

5 

UK 

(452) 

5 

UK 

(451) 

5 

Den 

(450) 

62 

UK 

(442) 

3 

Ger 

(437) . 

31 

Fra 

(425) 

69 

Ger 

- (424) 

H43- 

Ger 

(423) 

8 

Ger 

(416) 

3 

Fra 

(399) 

22 

Spa 

(392) 

66 

Spa 

(390) 

55 

Ger 

(388) 

62 

Ger 

(381) 

62 

Swe 

(367) 

31 

Ger 

(361) 

8 

Swe 

(354) 

34 

Ita 

(350) 

51 

Net 

(340) 

43 

Net 

(301) 

25 

Fra 

(287) 

/0 

Swe 

(270) 

42 

Net 

(242) 

8 

Ger 

087) 

55 

UK 

(251) 

51 

UK 

(261) 

70 

Bel 

G14) 

3 

Bel 

(371) 

6 

UK 

(418) 

45 

UK 

(422) 

34 

Fin 

(456) 

25 

UK 

(465) 

6 


Company 

British Gas 

Paribas— - 

TSB Group — 

St Gobaht - 

RoHs-Royce .......... — . — 

CGE 

British Airways _ 

Tractebel — 

InizJativa Meta — ..... 

Kymmene 

Cap Gemini Sogeti 

Ascom 

Louis Vultton — — 

Calor Group., — — 

SL Loub-Bouchon- , 

Agricoia FTnanzIaria — 

Mountleigh Group 

SMH 

Morgan Grenfell — — -~ 

United Paper Mill s — 

Cretfit Commercial de France „ 
SJmco Union pour KHabttation. 


London & Scottish Marine Oil . 

Hazlewood Foods. - 

Avis Europe — 

Britannia Aarrow Holdings— 

Sommer-Alllbert ■ 

Contlbel Holdings, 

Polly Peck International — — 
Ratners (Jewellers) 

Atlantic Computers 

Euromarthe 

MAI 

Fisher (Albert) — . .................. 

APV Baker 

Interdiscount - — 

Buhrmanrv-Tetterode 

Amer-Yhtyma 

Carnoud 


Williams Holdings 

Credit Fonder et Immobilier — 

Meriin-Gerin 

Wartslla 

Dally Mail & General Trust............... 

Wates City of London Properties — _ 

Boliden 

Dragados Y Construcciones 

Hafslund — — 

Mount Charlotte Inve stm ent s ..... 

Tomkins F.H 

Greycoat Group 

Cartier 8urgo 


to the 

List 


Country 

This 

year 

Sects 

NK 

14 

51 

Fra 

76 

62 

UK 

81 

62 

Fra 

200 

43 

UK 

125 

6 

Fra 

331 

5 

UK 

144 

45 

Bel 

170 

6 

Ita 

184 

70 

Fin 

201 

31 

Fra 

203 

5 

Swi 

215 

5 

Fra 

252 

34 

UK 

298 

51 

Fra 

300 

25 

Ita 

310 

43 

UK 

315 

69 

Swf 

326 

48 

UK 

329 

68 

Fin 

335 

31 

Fra 

342 

62 

Fra 

344 

69 

Ger 

361 

34 

UK 

367 

51 

UK 

370 

25 

UK 

408 

41 

UK 

414 

70 

Fra 

420 

10 

UK 

421 

-70 

-UK 

-42Z— 

- 91 

UK 

424 

34 

UK 

430 

5 

Fra 

434 

34 

UK 

439 

70 

UK 

440 

26 

UK 

446 

6 

Swi 

454 

34 

Net 

457 

31 

Fin 

460 

43 

Fra 

461 

31 

Ger 

462 

34 

UK 

466 

10 

Fra 

470 

69 

Fra 

474 

5 

Fin 

475 

6 

UK 

476 

70 

UK 

477 

69 

Swe 

480 

8 

Spa 

484 

3 

Nor 

492 

35 

UK 

494 

29 

UK 

497 

6 

UK 

498 

69 

Ha 

500 

31 


their marketing efiforts by creat- 
ing greater name recognition 
around the world. 

All of these arguments tor a 
global market may still hold 
good. It may be that the advance 
of technology and of global re- 
search capabilities has already 


created a firm enough bedrock recession. 


nies have found their shares 
flowing back to Tokyo after list- 
ings in New York 
For a while, at least, the par- 
ticipants in the international 
equity market will have time to 
review their issuing techniques, 
for there seem unlikely to be 
many new issues until markets 
have calmed down. Companies’ 
needs for new capital will in 
any case be reduced if there isa 


for a tine international equity 
market to develop. It is also true 
that foreign investment in equi- 
ties existed before the past cou- 
ple of years and will no doubt 
continue. 

However, the development of 
more broad-based international 
market had already encoun- 
tered huge obstacles. 

Most important, these related 
to the market’s infrastr u cture. 
Many countries have outdated 
settlement systems, for exam- 


After the stock market shock, 
however, there must be doubts 
both about investors* long-term 
willingness to pot their money 
abroad and about companies’ 
desire to issue shares abroad. 

’ Tim former may feel that they 
should stick with what they 
»i i nit they know - their home 
market - and steer clear of vola- 
tile foreign markets that they 
don’t know. Issuers may feel 
that their share price is less se- 
cure if there are substantial for- 


ple. By some estimates, 40 pef elgn holdings - particularly if it 
cent of international equity turns out that foreign investors 


trades used to foil because of 
problems in passing on details 
from party to party in foe pro- 
cess loading towards final set- 
tlement The result is that foe 


have been among the first to 
bale out recently. After Octo- 
ber, forecasts about the fixture 
development of the market 
would be rash. 


Takeovers across frontiers 


Deals multiply 
but are smaller 


AS THE number of cross-border and Akzo of the Netherlands, 
■takeovers and mergers in Eu- have all been involved in some 


rope begins to mnli 


lergers 

mltiply. 


mammoth takeovers. 


America is still the happiest Henke L, the smaller West Ger- 


I 'hunting ground for European 


chemicals group, 


companies seeking to expand known for its range of washing 
[by acquisition. In the first nine powders, has also been actively 


mouths of 1987, UK companies pursuing size through acquisi- 


jalone raent £15bn on buying as- 
jsets in the US. 

j But in mainland Europe too, 
{as one by. one all the old barri- 


tion. 

But In many cases the struc- 
ture of the deals, most notably 
the use of cash rather thaw 


(41) CIte-Gelgy 

(45) Thomson — 

(46) Montedison .. . .......... 

(50) BMW 

(49) Mannesman!) 

(25) Petroflna — 

(63) Ford Werke 

(57) Brown Boverl & Co 

(34) INH 

(79) Electrolux 

(48) Krupp (Fried) 

(42) DSM 

(47) Grand Metropolitan 

(53) General Electric 

(67) Carrefour 

(37) Esso AG 

(80) Electrolux 

(55) Gaz de France 

(61) Opel, Adam..... 

(78) Norsk Hydra 

(73) Dalgety — 

(— ) Dee Corporation 

(69) MAN 

(62) Mtdielfn 

(58) Akzo — 

(56) Ruhrgas — „ 

(51) British Coal 

(66) Generate des Eaux — 

(77) ASEA 

(60) SNCF 

(72) Migras 

(68) Ford Motor Company . 

( — ) Hanson Trust 

(— ) Bouygues 

(76) Maries and Spencer — 

(59) Sacllor 

(65) Statoll 

(70) IBM Deuische)amJ._ 

(71) BTR 

(86) Salnsbury CJ.) 

(95) AEG 

(96) Karstadt 

(83) IBM France 

(84) Degussa 

(93) Allied- Lyons - 

(89) Tesco Stores 

(40) Esso UK 

(94) Solvay etCle 

(74 > Haniel — 

(— ) Deutsche Lufthansa 

(64) Neste Group — 

(90) Pechlney 

<— ) Thomson-CSF 

(97) Post Office 

(75) British Steel 

(— ) Coop (Schweiz) 

(— ) Aerospatiale 

(— ) Olivetti 

(85) Rover Group — 

(— ) Saab-Scanla 

(— ) Co-op AG 

(— ) Gallaher 


10.580.2 
10,3165 

9.753.5 
9,630.9 

9.476.6 
9,304 J) 
9,172J3 

9.168.4 

9.052.4 

8.734.7 

8.713.7 

8.647.6 

8.619.2 

8.547.5 

8.475.8 

8.438.9 

8.374.7 

8,202a 

8,158-8 

8,090J 

7.998.4 

7.881.7 
7,7405 

7.628.8 

7.623.7 

7.559.0 

7.354.6 
7,2835 
7,263-2 

7.190.7 

7.128.4 

7.124.9 

7.023.9 

6.905.8 

6.875.4 
6,8495 

6.815.4 
6,6113 

6.547.0 

6.282.9 

6.169.7 
6,123a 
6,03L2 

5.978.2 
5,8883 

5.852.7 
. 5,7763 

5,7403 
5, 728ft 
5,7102 

5.709.9 
5,7083 

5.666.7 
5,6573 

5.637.7 
5,5942 

5.573.1 
5^60.6 

5.557.9 
5.556J 

5353.7 
53463 


310236 

31.1236 

310236 

310236 

310236 

310236 

310236 

310236 

310236 

310236 

310236 

310236; 

3039.86. 

313337. 

310236 

3302.86 
31.1236 

3102.86 
310236 
310236 
303636 
25.0437 
30.0636 
310236 
310236 
31.1236 

29.0337 
310235 
310236 
31.1236 
310236 
31.1236 
303936 
3L1236 

31.0337 
310236; 
310236 
31.1236 
310236! 
313337 
310236 
310236 
31-1? 86j 
30.0936' 

0733.87 
28.02371 

31-12361 

31,12361 

3102.86 

313236 

3L1236 

310236 

310236 

013437 

31.0337 

310236 

3102.86 

3012.86 
310236 
310236 
310236 
31.1236 


A-Z list of European Top 500 


«n and inhibitions to cross- shares as a bargaining counter, 
•frontier links are gradually dis- has meant that their impact can 


mantled, merger mania is be- be slow to filter 


ginning to take hold of the cor- stock market level. This may be 


porate consciousness. 


about to change With Asea of 


Is this trend discernible with- Sweden linking arms with 
Un the latest FT 500? If the an- Brown Boveri of Switzerland, 


COMPANY RANK 

AacSncf MmcbewT — 162' 

ArttTtgli— — 483 

Abbey Uft 257 

Accor iDtemUonS 337 

Ada 241 

AEG — ». 93 

Aran 196 

AG Ftaantfere 291 

ABA 2Z7 

AartcataFtaaraMi 310 

Ahafd 303 

rAA’LMdt 56 

Atao ioe 

Akaul (Oe Flnudere] 321 

383 

AJgmeoe Bk Nederland 148 

Afltaoza 104 

AmanzHoUng 15 

Allied CdMdierov 445 

AJSed Irldi Banks 372 

AJIfed-Lyons — 51 

Abnaafl 387 

Ahttm 308 

Ataaa 452 

Ateubae 347 

Amtp-Yhuwa- 460 

AMEV 191 

AnwBaat 174 

Amtfiad m* 

APV Balter 446 

Argyll Group 86 

Arjomart-Prfnux 397 

Ascom 215. 

ASDA/UFi Craut 79 

ASEA 90 

Ashley (Lam) 464 

AstaPceSdicKauftiaw. 361 

Associated British Foods 109 

Anodattd Brttlsh Pom 357 

Assoc i ate d Wew spa ii an iM. 245. 


COMPANY RANK 

BcMrsdorf 263 

Bckaerf —II — 423 

BerfafordS&W Z75 

Berliner Kraft usd Ucfat 3S3 

BET 105 

BHFBank 297 

BIC 363 

BICC 246 

BtoeCtrcfe Imltstrte — 160 

BOCCroop 74, 

Boliden 480 

BwhioIb 396 

Hooter 320 

Boots a 


COMPANY RANK COMPANY RANK 

MfrMaBtCsaTa W HaMeterverZnsent — 369 

OstedtrHmr 4 I M o fteo 153 

Oetaety-, T"2» HeMetW^oerfUnMI— 368 

Dm 354 HepwrthCerandcHIdBS. ” 386 

DMoolMenaBoesd 37 V HEW l. 409 

DeURoe 299 Hj*oetoteiB»ooU_ S4 

Doe Comoratioa 88 HH Samel Eroop —— 399 

ZU HRtahMn HoUngi 168 

nSter. »■ MM 238 

404; Hcodttl — . 22 - 

DaD*a*eBM* 371 HoMemyMaaaawneni. 224 

Deotsdie Bank 16 JWnmjBrte 350. 

Dixons Creep 154 H orten— , 469 

Dowry Grow 328 HofisMstadea ia 

Dragos Y CMncdHS 484 jtessg ■■ ■ 498 

Dresteer Btefc— 92 J85 

ORC 377 «•]-—- 253 

Drnum 302 hep Chemical bidostrles- 10 

gn- M6 tadmpe- — 317 

EtetHdeVksgo « I n d grtw o d en 336 

EMoraamomits 364 WrirthaUrta 184 

Brese -fc- 87 Inspectorate InW 189 

Electrowatt 19S lastRot M erieoa 352 

BfApM aa 39 teerani 96 

riTriiri 250 laterd h oo t— 454 

EagSWCUaaCiei 212 Metal Boa 226 

Ease Conelt 385 M«a»BesoBsdaR — — 3U 

Enterprise 01 237 Meyer IdtOtMMatf 448 

EteNy S Lm LRo Amco 473 M k SWBn 78 

Ericsson LM 205 tHdKOe) 101 

IHrattf 305 HUmd Baric 147 

Essflor — - 381 IDbao (Asttcaradonll _ 495 

riaumaii w ... 494 MoetrHennessy..,— 134 

FAG KogoifiaAer 433 Moottdltoo 77 

FaMmhM Hotel 267 Mtnpafl Crodhle 490 

Ftorwad 327 Moivm Gronfell 329 

Flat 9 Mount Charlotte In. 494 

First National Fkmro 406 MountWshGnm— — 315 

Fbbtr(Afe>rt) — 440 Mancteter Rate. 40 

Fhnor — 112 National Westntater Bk. 23 

Fontana CU) 67 Natimta-Nadsrimtan^ 68 

Fnomwi 449 Ntdirteudie MMd. 394 

68-te»-BM ; 390 Untie — 11 

G«erXAis*M 85 Nett 239 

Geasral Electric » Ntadorf Conqmr 49 

GeneraMBNaw! 179, MoMInfagrfs 345 

GMcrriaOcddotne 223; Molda. 183 

Generate des Faua 31S Noron ; 37S 

GcoeraU (AssknaxtenO 8 Monk Data 307 

Gosaert Haa Pwrtrwa 42S HarakHiWo 1ZZ 

ttfcWfidB ~ r 3Bh Ncafhwq Fnml 294 

GKN 229 Mwoladustrl 312 

CHvnltnlAy 5 ftOCgO BjOCO Alll L t U llO-. 313 


COMPANY 

HaMcSwwrl 


DeURae 

DoeCorporatten. 


Bowater Maoris 

BPB lotatria 

Britanola Arrow Hokfings 
British & Coonw'h Hlgs 

Britfch AerwpacOi 

British Alnnyi 

British Gas.. 

British Land 

British Petrotemi 

British Prirfg & Cool Cor 

BritUTefacom 

Briton 

Brawn Boverl A Coapany 


Dtes Grasp. 

Dowry Groap — 

Dragos Y ConscdHS 


BfAratta te e. 


Brawn Booerillssitiiika. 499 
BSH Graope 73 


BianahOa _______ 

tatsnGraRL 

CaMeAVMrelass 

Ctedtery Scfawtupts _ _ . 
Crio donla loresfnts — 

Cater Group 

Cap GenM Sogeti 
Csrttoo Cono nUrailii . . 


AjfesCapoo W Carrefoar 

E ? y* . fSS CarUeroBraga 500 

Baden- Wurtterabergbdw 3« Cad no 288 

SwIteMaB — 202 Crmeni DrutWnnfHItiii. 412 

Brioba toaraace 6 rty B4 CFAQ 444 

Basra deter Svinsra Ita S 8 CGE 131 

S^ h ca lrs ... 210 Chargeort 222 

gyoCert gl lU Omar ConMHtad — 410 

Banco de WBao- U 6 Oh^elgr ZB 

Banco detantawter 6 fi OnMesFrancals 273 

Banco de Vizcaya 166 CMi Mcd te t ra nee 340 

Banco ENttMldeCraiBta cotiltoGirMp 496 

BanwErterior- — CoatsVlyofta 106 

Banco HIrbm Aasericfo 251 rmiuM — , , 314 

Banco Popular Espanol— 242 Cofido 465 

PWL AB .... ^- Bb QtaateVMUNnu 8 — 400 

tofcot teri Md - «7 CwonietctelUritea 141 

Bangae Bnwtas Lawtet 3» Onpagria ImL Rtarite_ 284 
B aaye c antaiate Vaaf e 395 Corap. Espanetede P«_ 318 

Barcteys S3 CcnoOdated GoH FteMl a 

BaranDeoelop menp — 441 OoatiMKoldtagf 421 

BASF 24 Coatigas 463 

I® « Coatinwtdrw— I Writ, 281 

BAT Industries 13 CooteanGraop 1£L 

Bgysr. 17 rnp^ M H— i r..ii.M 1 4 M 

BayerisdwHkn&WHBk W CastataGraqi 393 

gw erittl w Moterw BPe 42 Coortadtis UQ 

BajcrfacheVareridbank- 124 cnafltDoniddeFrnr^ 342 

BBAGraap 4S7 Cradt Fourier da Franco 247 

Beaaer c. H. Kottsgs — 274 Cndt Fonder et tnantlr 470 

Beedaan Graop — 32 GrtdRSote 26 

BcMrtMy 343 CndtmteltSaakiertta. 304 


COMPANY 
Plraa&Conpaqr — 
PfrtiNiotemtionte. 


RANK COMPANY I 

. 491 I Springer, AseJ 

289 Standard Chartered— 

118 STC 

39B- Steetiey 


I 'swer Lb yes, it has to be suhstau- 
Itially qualified. Of the dozen 


i6i j|UK companies that have not _ 

reappeared in the rankings this Law, the UK life assurance 
409 1 time round, as a result of being group, the merger game in Eu- 


tobesubstan- and Compaguie du Midi, the 
Of the dozen French financial group, finally 
hat have not winning control of JSquity and 


Polly Peek luted.- 


framing 

P rinto ut |» (Grown) . 


S sfaer 

Sa AiOanoo Lnin hac* ^ 
Saw Ute Assoe Soctety _ 


taken over, only two are the re- rope looks to have moved up in- 


sult of nou-resident predatory to a whole new league since 
moves. Associated Book Pub- mid-summer. 


Read Eteartatis -■ 

RmfcOravrisatioa- ___ 
Roiria Hovis McOouWfl— 

BAS 

HBisb C ls w diui l 


Swptia Citaton I! U0 lishezs fell to International 

awes Hmd rt i twnfcw .. 17B -Thomson of Canada; and Conti- 
;beL part of the old Imperial 
Swiss Rehsmaot Group. 64 Continental Gas group, was 
swbVMkshaak 164 snapped up for around $72S0m 


Sydfcrrft 

Tunac 

TMe&lyte — - 
Taylor Woodrow. 
TcMfwrica 


IS | by a Belgian consortium formed 


iternational Its a very notional exercise, 
j and Conti- but if the stock market values of 
Id Imperial Asea, Brown Boveri and the lat- 
grou p, wa s tor’s listed West German sub- 
und $72SOm sidiary, Brown Boveri Man- 
Sum formed nhe i m , are combined, the 
es Lambert enlarged group would have 
been the 47th hugest company 
ictors of the in the FT 500, wedged in be- 


RtoTlnto-ZI 

RMCGrop. 


Tosco Suras CP 
Thomson-CSF - 
Than EMI 


EagMCUteCtol- 


Entcrprtse 01 

EtpRy S Law LRo < 
ErtcaonLM... . 


Pn cfamm -221 tlGtnv ~ . . 

RoAs-Rovce 129 TowM» FJ..--.— 

262 Toro (AniandouO 

Rothmans IntmMkari- 206 Total 

RoOhcMWJ. 316 TTOctrilH— 

Rowniraa ———ZZI 173 Trafalgar Haw . . . 


K by Groupe Bruxelles Lambert enlarged group would have 
323 and Tractebel- been the 47th Largest company 

z*| ; Beyond the UK sectors of the In the FT 500, wedged in be- 
^ FT S00, there is little direct tab- tween BTZ, the international 
69 ular evidence of pan-European mining house, and Bara, 
£ takeovers. Although there have Britain's biggest brewing group. 

been plenty of big domestic On this basis, Asea-Browu Bev- 
el mergers - in France, for exam- eri would easily become the 
497 Iple, Moot Hennessy’s link with - biggest Swedish industrial 
U7 xouis Vuitton and the Woltors- group and would be the ninth 
in Kluwer publishing amalgam- largest company in Switzerland. 
137 lation in the Netherlands -. most By the same token, Compag- 

nie du Midi stonds to be trana- 


FAC Khgrifiscke- 

CALHAtelUiJ 
rvJMMmHSV si ras w ■ * 


Rmrntrc* 173 Trafsiita 137 lation in the Netherlands - most 

19 ? ** of the deals done within Europe 

SSiSSSSLlZII 70 TSBC^p Bh in the 12 months up to June this 


-nmcrSNmS. 


in the 12 months up to June this formed by its purchase of Eqni- 
year have either been too small ty and Law. On the basis of a 


First National FI 
FbtarCAtem). 


SartcM&Saatdti. 

SAI 

SalmtamyJ 


els Gram— 
■ (CWrMrO. 


GoieratettesEau- 


Gtynwad Intartetioni — 

Soab arimi . . . 

GetitardBaak 

Granite Grow 

Grand MwxpoHtn 


223i Nrikte ,.. IBS m 

US Nona ; 373 Swofl ^. m 

S Honk Data 307 

425 NwskKrtko—— _ 1Z2 icntting » 

3Bh MorfhtrnFood 294 S~t*NtWCWteBriw_ 2« 

229 Ntwoladustri 312 ; ,2 

5 Noon Banco Anrirtano_ 313 -jerigwkX Cro op - S®3 

14? OPMflB dfT fiffn W TTTTTTTT 453 S g ft llCfl 4Q1 

3% Ocean Tramped & Trad. 435 SeriBwtaEkQrickted. 

436 OaopBsPidilMring 390 Stet. ... 272 

41ft fwm^ra-gt|siw>in „ . 258 SicaMI - - 7 

29 rOrtU 94 SoBllaFarsnrtB_— . 230 


Uwsrg— 297. 

UMater Z16- WnCTt 

Uiweraf pWMV 6 !a Stoc 

Untoo Bk dl Flnlaad 219 more 

Untea BkofSwItrart— L. 12 

UptnEtearka-FcoMc— 409 
Urtiori Y E3 Ftflta EjpSRBl. 428 iingfo 

United Bbcala 156 .CGI 

UMtEdBuMjtel 325 L] pr 

UatadNsw nw t w 243 ,r“i¥ 

mritsi Paper — 335 |b®t,h 
Vriw 429 ingfll 


to be caught in the FT 500 net, notional combined capitalisa- 


Venks- and Waste* 

VEW ; 


lit .where companies need to have 
6 !a stock maraet capitalisation of 
xn more than $500m, or have been 
^ ,privately arranged deals involv- 

428 iing family-owned companies. 

M6 , CGE, the big French electxi- 

cal aroop, makes a welcome de- 
335 (but, but this is all to do with be- 

429 ing floated back into the private 
sector by the 1 French Govern- 


WdariAL4M»- 
Van—BHI... ■ 


Wagom-UH. 


es need to have tion, Midi would become the 
capitalisation of sixth largest company in France 
m, or have been Just behind BSN, the foods and 
ged deals involv- brewing group, and would 
td companies. climb rapidly up the worid- 
French electri- wide financial rankings, 
a a welcome de- The pressures for change now 
ill to do with be- battering against the doors at 
:into the private. .Europe's business capitals can 
French Govern- be sum m ed up thus. In the nm- 
?L5bn p urc hase np to 1902, when the European 
1 business of ITT Community is committed to to- 
ctrolux and Er- tally freemg itself from trade 
den have both restrictions, barriers to trade 


Grot Portland Estaet— 3B0 ONcnddhtadK Lwdrtak. 488 
final Usiwrati Stans — 46 P & 0 Stem Narigutoa 57 

GrotonGraao — — — 49ft Psrgoa Hoktag za 

Bra Btmgfles Lateirrt ■ 197 Pirflai ■■■■■.. — — . 76 

Grardaa Rgyal Gstange. 123 PMriGmp 271 

Golawa 50 Pcaoor M2 

t Uefcrt^ 373 Pemteod tadoslrte* 293 

Hafttend 492 Pemodltad MO 

Hantertl . 384 Pwrter.StMti 280 

H teimiiun Property 181 Perafl ia,-,. « 

Ham Tint 20 **** » 

Harris Quecramiy Grow. 3SB PtaraBda 172 

Harrisons ACresSW-*— 244 PNte-. r- r r rr JS 

Haras CAgrflco) 301 PMBpi Kora. iHtestne 236 

KaNterSUdriaCitMp- 190 PSUagtoo Qratben— — . 83 
Kaitewood s Foo di— . — 370 .Plrdit .. ZNT 


Uteri W rite Craw 

Ufa nsite . 

WWrforiGtaa — ■■ . .... 

Wntes city UKte Praps __ 
WrB cwne 


ing uoaiea nack into the private. isarope-s business capitals can 
4?5 sector by the' French Govern- be summed up thus. In the run- 
177 ment than the $L5bn p urc hase np to 1092, when the European 
359 |of the European business of ITT Community is committed to to- 
209 l0 f the US^ Electrolux and Er- tally freemg itself from trade 
72 licsson of Sweden have both restrictions, barriers to trade 
482 Ibeen busily acquisitive in Eu- are already being cast aside: At 
2B6 rope, but not to the obvious benr the same time financial exper- 
473 efit of their respecti v e stock the is being rapidly developed. 
332 'market ratings. Volkswagen's making for much more fluid 


SMH 

Setitfa Nephew Ana 
Soritb W. H. A Son. 


Smarfh, JeTferan....— 214 

SdfaBPD 2S5 

SKAuadTMeradm M 472 
SgcGsfiite Bdstera— M3 
SocGnteSmeHtener. 180 


I Seat of Spain was mostly a cash 

Tit urn— ea. 447 'transaction. 

an By and large, Europe’s recent 

gj Kfffti te^rz: S ttoss4wrd«deals have been 
^ wnm(Coaixri)y)HMgs. 489 dominated by one tar two 
472 ??? I te . tadortiy.eestors,- of which 

J® m [electronics and chemicals are 

wootmrtb iS [the two most obvious examples. 

132 w w tt rae crginfceFtw.. 334 1 Major chemicals groups, like 
420 Zwkh uaut mm . .41 icl Hoechrt of West Germany 


SoteaystCie. 


dkswagen'a making for ™«»)> more fluid 
'per cent of stock markets and ramming 
Httyacash home to companies and individ- 
uals alike the ftill value of equl- 
pe’s recent ty investment Finally, a new 
have been breed of European enfreprs- 
two specif- neur has emerged, a toanaguial 
, of vdikh class hungry far performance 
imicals are and willing to look-far beyond- 
> examples, national frontiers. 


ZuricfttasorMH 


Jeffrey Brown 


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Financial Times Friday November 6 1987 




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Some fortunes of the upwardly and downwardly mobile 


Purchase 
helps rise 
of Reed 

REED INTERNATIONAL, the 

UK based pu blishing , paper an* 
par tagin g group was one of the 
most upwardly mobile compa- 
nies In this year’s league table. 

Reed, a company which has 
&ced a drastic process of res- 
tructuring in tne past three 
years, with significant Job 
losses. Jumped 28 places to num- 
ber 29 hi the UR 500 list and also 
rose from 124 to 59 In the Euro- 
pean 508. 

There were three main reasons 
for the rapid rise. One was the 
purchase last September by the 
Reed subsidiary Cahners Pub- 
lishing Company, already the 
largest publisher of specialist 
business magazines In the US, of 
Technical Publishing, from Dun 

& Bradstreei for $25<hrL 
Hr Ren Segal, head of Reed's 
publishing Interests In the US, 
described the purchase as 'like 
buying the neighbour’s term. It 
fitted all the gaps in our busi- 
ness.' 

The purchase followed a move 
into American consumer pub- 
lishing for the first time with the 
t4tm purchase of American Ba- 
by, a monthly with 1m circula- 
tion. 

The other mate impetus came 
from baying from the US of 
Reed’s shares in June - amid 
speculation that someone might 
be planning a takeover attempt. 
In a week Reed's share price rose 
by 117p to 576, and Indeed re- 
corded a high for the year of 
633p. 

Mr Peter Davis, chief 'execu- 
tive of Reed, says the share buyer 
turned out to be Hr Rupert Mur- 
doch, tiie American-Anstrallan 
publisher, although his stake 
never got beyond £5 per cent 
The fundamental reason for 
the re-rating of Reed Interna- 
tional - before the foil in world 
stock markets pulled its share 
price below 4Mp - was the res- 
tructuring which has led- the 
company to concentrate hewrBy 
in publishing in bath the UK-and 
the US and to pull out of a series 
of businesses ranging from na- 
tional newspapers to wallpaper 
production. 

Profits for the year to March 
were ahead of most expectations 
at £188m - 37 per cent up on the 
previous year. 


“We are demonstrating that the 

various strategy moves are cem- 
tag assays Mr Davis. 

Although Reed's main over- 
seas thrust has.been in North 
America, the company owns five 
packaging technics In Holland 
ud has bought a specialist West 
Germany publisher Sauer. 

In July, Reed went on the ac- 
quisition trail again and bought 
the Octopus Publishing Group 
ter £535nu The purchase turned 
it into the largest British owned 
publisher, with a turnover In ex- 
ce*£ of Elba. 

Reed also generated a host of 
headlines, many of them hilari- 
ous, when it bought what one 
American correspondent de- 
scribed as "the bfUe of the US 
entertainment industry and lex- 
icon of show business lingo”, or 
Variety. 

The continued emphasis on 
publishing at Reed International 
has led many close observers of 
the company to wonder whether, 
in the medium term, Reed will 
get out of paper and packaging, 
as it has got out at so many other 
hnrinc s ses in the past few years. 

Raymond Snoddy 

Smurflt 
ties up US 
package 

JEFFERSON SMURFIT Group, 
Ireland’s largest corporation, 
has been livening up the alleg- 
edly dull paper and packaging 
sector by exceeding even its 
own expectations of profitabili- 
ty- 

In the FTs ranking of the top 
European 500 companies, Smur- 
fit has jumped from 342nd place 
last year to 214th, more than 
doubling in market capitalisa- 
tion from 5581.6m to $1539 -8m. 

The popularity of the share 
price - 5t25 Irish pence this year 
against an . average 2.18 Irish 
pence a year ago - reflects a 
buoyancy that has become a 
characteristic of the company 
in recent years. 

Pre-tax profits rose from 
I£24.12m to l£6A23m (£57.6m) in 
the six months to July 31, ex- 
ceeding the yearly profit figure 
of I£60-lm(£54m) to January, 
which was itself better than the 
company had forecast. 

Mr Michael Smurflt, chair- 
man. is confident of the future, 
seeing an "extraordinary year* 
in prospect, with the outlook 


particularly bright in the US, 
where Smurflt completed an 


debt, which is declining test, l. 127, 52 and 43 per cent respec- 
on Gated rate, giving the comp a-, tively, A Swiss VaEksbank study 


SFr40 per registered share and 
from SFr7 to SFtS per bearer par^ 



Mobil, for $L16bn by a company 
by Smurflt and 


Corporation, from the oil group tions remains' undeterred." *We possible 'to a large extent .the group's 30th anniversary. 

had hoped to one or two through a programme of caniin- For holders of the so-called *Ba- 
major acquisitions in the cor- nous acquisition. According to by Adte* beneficiary certificates . , 

rent year, but the price of busi- group manager Mr YvwJ, Pater- equal to one-tenth of registered- clete Generate de Belgique, the 
nesses has changed d ramati cal- not, takeovers have accounted share rights, there was a cone-' country's largest holding com- 
ly in the last few months - we for about half of overall. growth sponding pay-out of SFr4.$0, in- *>»? with a 15 per cent direct 


owned equally _ 

Morgan Stanley, the US invest- 
ment bank, came just a few 
months after Smnrflt’s acquisi- 
tion of 80 per cent of Publishers 

Paper, a newsprint company, 

for $1 33m. 

"PP and CCA gave Smurflt the 
double whammy and put us in 
the class we are today/ says Mr 
Smurflt 

But the FP acquisition, also 
concentrated attention on the 
company's debt burden - bal- 
ance sheet gearing had been 
pushed over the 70 per cent 
mark. 

Smurflt responded by using a 
technique described by Mr 
Smurflt as "innovative financ- 
ing" with its CCA acquisition. It 
took effective control of a com- 
pany bigger than itself without 
the slightest effect on its bal- 
ance sheet 

This financial sleight-of-hand , 
achieved principally by the use 
of $800m in bank borrowings 
and the sale of 3400m in subor- 
dinated debt otherwise known 
as "junk bonds", transformed 
Smurflt into the world’s eighth 
largest paper company. 

Off-balance sheet financing 
was not a technique unknown to 
Smurflt In 1982, the group 
bought out the Diamond paper 
and packaging interests of Sir 
James Goldsmith, the veteran 
industrialist and adopted the 


Belgian shareholders are noto- 
riously secretive, hold their 
shares in bearer form, and sel- 
dom wish to disclose their iden- 
tity by turning up to vote at an- 
nual meetings. 

In this way Tractebel itself is 
effectively "controlled" by So- 


duding bonus. 

company 
number of bearer shares to 
IOOJMM and introduced the cate- 
gories of BPCs and "babies". Far- 
ther increases are on the way. 

The holding company has her- 


want to avoid paying a premium in the past two years. Between 
at the top of the market,' says the start of 1988 and the end of 
Michael Smurflt. this September there have beat 

■Logical opportunism* is the na fewer than 22 acquisitions, 
chairman’s phrase for Jefferson Most of these purchases have 
Smurfit’s watchful eye on po- naturally bens of only relatively 

tential purchases. The same small-scale operations. This An- _ 

sentiment, no doubt, haunted gust, however, Adia was sudden- aided the issue of Swiss-Franc 
its origins, when founder John ty in the h eadlines when it con- bonds equipped with equity war- 

Jefferson Smurfit, a master tai- ducted "exploratory — — *• — '“** ' “ ‘ 

lor, switched to packaging on conversations' which could have 

led to the takeover of the Indus- 
try leader. Manpower, which had 
1986 turnover of more than 
$L2bn. However, this was in the 
nature of a white-knight effort to 
help the Milwaukee group pen A 


being sold a share in a carton- 
making business by the priest 
who officiated at his wedding in 
1934. The board is now domi- 
nated by his four sons - Michael, 
Jefferson, Alan and Dermot. 

Dina Med land 


rants with subscription rights 
for existing share and certificate 
holders, as well as the interna- 
tional placement of 90,000 new 
BPCs. also with subscription 
rights tor the coming warrant- 
bond float. 

The company's management 


off an initially unwelcome bid by for some time has held 20 per 


Adia will 
seek more 
purchases . 

ADIA, THE Swiss-based "temp- 
concern, has been expanding at a 
crocking pace over die past few 
years. Revenue this year is likely 
to be about twice that for 1984, 
while consolidated net omitag S 
conM well be double the 1985 fig- 


Bri tain’s Blue Arrow. 

It did not take Adia tong to de- 
cide that the price, subsequently 
raised by Blue Arrow, would 
have been out of proportion to 
the resulting benefit. T3te addi- 
tion of such a large organisation. 
It was feared, woeud make It hard 
to keep tty current profit-growth 
rates. 

Adia will now continue with 
Its successful combination of in- 
ternal growth and farther take- 
overs. According to Mr Paternot, 
the acquisition policy will be 
aimed particularly at buying 
specialised firms in such sectors 
as accounting, data processing 
or medical services and well-es- 


cent of equity and 40 per cent of 
the voting power. That still 
leaves a large and growing vol- 
ume of outstanding equity. 

In this connection, Adia Is one 
of few Swiss companies to allow 
foreigners to buy Its 100JWO reg- 
istered shares. 

John Wicks 

Tractebel 
issue is 
postponed 


stake, plus indirect interests of 
8 and 10 per cent respectively 
through Sofina and Electrafina. 

TTactebel’s key energy portfo- 
lio consists of substantial direct 
and indirect interests in Bel- 
gium’s three largest utility com- 
panies, making it the main and 
controlling shareholder in each 
case: it has 21% in EBES, 2i<% in 
Intercom, and 25 per cent in 
Unerg. businesses which be- 
tween them produce more tban 
90 per cent and distribute about 
80 per cent of the electricity 
consumed in Belgium. 

It has, meanwhile, a mostly in- 
direct stake of 33 per cent in 
Distrigaz, which provides Bel- 
gium with natural gas from Hol- 
land and Algeria and has a mo- 
nopoly in the distribution of gas 
to large customers. 

In addition, Tractebel has a 
key 5 per cent holding in the 
capital of Petrofina, the oil ex- 
ploration and production group. 

Without doubt, the iqajor 
event of the year for Tractebel 
has been its successful take- 
over, with Groupe Bruxelles 
Lambert tGBL), of Contibel, the 
Belgian part of the old British 
company 1C Gas. Contibel has a 
7.2 per cent stake in Petrofina - 
which is to be split between 
GBL and Tractebel - as well as a 


same principle - of keeping the This has been accompanied by or medical services and well-es- .. , . . . GBU and Tractebel -as well as a 

deal offthe balance sheet till it a leap in Hie Lausanne comp*- mmrf in promls- TRACTEBEL, Belgium s biggest collection of other stakes m 

was fi n at ^aiTy reasonable to ny's market capitalisation, h.* wflwwhinii electricity and gas utility, 170th Belgian energy utilities which it 

which has doubled in less than a Shareholders have every rea- * n European list, was ' 

year. Adia is up to 241 from 414 «,a to approve of the company's formed last year through the 
in the European list record to Market capital!*- merger of two established bosi- 

Tbe group, the world’s third- ztion has trebled since the end of nesses, Tractionel and Electro- 
biggest temporary-employment 1M5 to reach SFrfcJBbn in foe beL 

specialist after Manpower and of a massive rise in share Roughly 75 per cent of its 

Kelly, has never looked back af- prices. portfolio; and 85 per cent or its 

ter emerging from the re c essio n In the 12 months ended Sep- gross income, come from the en- 
of the early 1986s. Its t ur nov er, tember 30 alone, the bearer “Ef sector (including a sise- 

seme 90 per cent of which comes share has rocketed from abIe slice of the major Belgtan 

from its temp agencies - includ- sFr7J56 to SFr 11200, the regis- oil group Petrofina), but the 

ing those of the Alfred Marks or- tered share from SFr3,600 to company also has interests m 

ganteation in London - has risen SFr6£6t, and the participation telecommunications, cable tele- 

steadily and rapidly since 1982 to certificate from SFr678 to rision and engineering. 

' Tractebel is a major Belgian 


take it on. 

Debt reductions in both CCA 
and Smurfit Newsprint (as Pub- 
lishers Paper was re-named) 
are exceeding expectations and 
in the case of CCA could be aa 
much as 3250m for the current 
financial year, ending in De- 
cember; the company said. Mr 
Smurfit believes half the debt 
incurred in taking on CCA 
should be paid within two 
years. 

With CCA, Smurfit has bene- 
fited from capital expenditure 
by the previous owners and 
pension fluid savings, together 
accounting for immediate 


savings of about I£140m. 

A debt-equity ratio of 56.3 per 
cent at the time of the interim 
results this year is seen as "com- 
fortable* by the company, and in 


reach just over SFrLSbn tost 
year. 

The management parent, Adia 
International, expects further 
growth of Id least 25 per cent" 
for 1987 and another good year in 
1988. 

Profitability has improved 
even tester - group profits have 


SFT1400L 


This year, dividend policy of holding company; that is to say, had to be postponed, 
the holding company, Adia SA, 118 profits primarily reflect the The impact of the slide in 
- board dividends which it earns from stock prices, however, goes be- 

yond this technical Inconve- 
nience. The £448m which finally 
■clinched the Contibel deal was 
at a fixed price in July, leaving 
at the time a comfortable profit 


French markets are worried about the pace; with which privatisation succeeds privatisation 





test on the downhill run 


FRANCE’S AMBITIOUS priva- 
tisation has redrawn the map of 
the country’s economy and put 
back into the market place a 
Who’s Who of Its major compa- 
nies. 

Already three of the five most 
actively traded shares in the 
main French stock market axe 
privatised companies - the two 
banking groups Societe Gener- 
ate and Paribas, and the tele- 
communications and heavy en- 
gineering conglomerate 
Compagnie Generate d'Etectri- 
cite (CGE). 

Waiting in the wings are Suez, 
already in the process of being 
privatised, Rhone-Poulenc and 
Pechiney, which hope for a 
place in the calendar early next 
year. Their non-voting invest- 
ment certificates have been the 
three most actively traded 
stocks in the second division of 
the Paris market, the cash set- 
tlement section. 

The Zl fiota tions so far accom- 
plished have added around 
FFrl20bn, qr over 10 per cent, 
to the capitalisation of the 
F!rench stock market 

At the same time, the privatis- 
ations have achieved an un- 
precedented success in drawing 
in a range of new investors who 
bad never before put their mon- 
ey in the bourse The FFr17 ^bn 
flotation of Paribas in January, 
the second of the privatisations, 
drew a record 3.8m subscribers, 
25 times as many shareholders 


as the bank had before its na- 
tionalisation in 1982, and doa- 
ble the previous total of direct 
shareholders in France 

If subsequent flotations have 
foiled to live up to this prece- 
dent - and several of them are 
relieved that they do not have to 
deal with this u n manageable 
number of small shareholders - 
they have still attracted 15m ap- 
plications, or an average of USm 
per flotation. 

Officials now estimate that 
there are now around 6m direct 
shareholders in France. 

The test for the Government is 
now h agmni ng -with the French 
stock exchange, following other 
world equity markets, plunging 
rapidly downhill, the next wave 
of flotations feces a much great- 
er test 

The fell in the market has now 
brought most of the privatised 
companies share prices down 
below their issue prices, shak- 
ing the confidence of the gener- 
ation of new shareholders who 
had firmly fetched on to the be- 
lief that a privatisation was a 
surefire investment that could 
not go wrong. 

Even if foe offer for sale of 
the investment and banking 
group Suez, currently in prog- 
ress, is comfortably oversub- 
scribed, anything much below 
2m applications may appear 
rather like a failure in the ma- 
chismo contest with its great ri- 
val Paribas. 


Mr Edonard Bali ad or, the fi- Mr Balladur added that im- 
uance minister, has left himself portent rider that these priva- 
room to manoeuvre over the tisations would only be made if 
timetable of the fa tore prtvatis- market conditions permit - and 
ations. in the current state of the 

Under attack over his has- French equity market it would 
dling of the privatisation pro- be hard to claim that they did 
gramme from the socialist oppo- so. Nevertheless, his announce- 
sition, which accused him of meat was widely perceived as 
placing his political cronies in an acceleration of the pro- 
file "hard cores* of friendly gramme, especially since most 
shareholders, created to protect stockbrokers had expected a 
the newly privatised companies halt in the privatisations early 
from immediate takeover, Mr next year as the presidential 
Balladur chose to connter-at- election campaign got under 


the demands these companies privatisation, and the ministry 


tack by ordering Aril steam 
ahead. 

The minister announced that 
after the flotations already un- 
der way - of Suez, and Matra the 
electronics and defence group - 
he would try to privatise two in- 
surance companies. Union des 
Assurances de Paris and Assur- 
ances Generates de France; one 
of the two remaining major 


way. 

The debate over whether the 
market has been saturated by 
the privatisations never really 
got under way in the early 
stages of the campaign. The re- 
sults in the flotations of St Go- 
bain and Paribas so far ex- 
ceeded the most optimistic 
forecasts that earlier calcula- 
tions of the French market's ca- 


might themselves have made on 
the markets. 

If the reasoning smacks of 
sophistry, it remains true that, 
because of the appeal of the pri- 
vatisations to new investors 
who have in most cases re- 
mained loyal to their compa- 
nies, cash has mainly been 
drawn from outside the mar- 
kets. 

There has been tittle sign of 
net withdrawals from mutual 
fluids investing in the equity 
markets, although net subscrip- 
tions have flattened off partly 
under the influence of the with- 
drawal of tax breaks. Nor have 
the privatisations prevented the 
placing of another FFrSZbn of 
new equity on the stock markets 
in the first six months of this 
year, slightly down from 1986 


is now putting the fin is h i n g 
touches to a plan to split the 
payments on the privatisation 
of UAP over a number of 
months. 

Deferred payment Is more dif- 
ficult than in the UK, because of l slon networks all over Belgium. 


juridical complications, but the 
solution appears now to h 
been found: 

If Mr Balladur succeeds in 
putting through all the privatis- 
ations he has announced, he 
will in the space of 16 months 
put on to the market two-thirds, 
by value, of the companies 
listed as candidates in the 
French privatisation law - 
which foresaw that it would 
take five years to complete the 
programme. 

After next year’s presidential 
election, a new Socialist gov- 


state banks. Credit Lyonnais or parity to absorb all this new eq- 
Banque Nationale de Paris; and nit 
roba- 


one industrial company, 
bly Rhone-Poulenc or r 
by the end of March next year. 

Depending on the precise 
choice of companies, tiua pro- 
gramme could bring companies 
worth from FFr70bn to 
FFrlQObn on to the market in 
the space of seven months, com- 
pared with around FFrlOObn in 
the eight months between the 
flotation of St Gobain in Decem- 
ber last year and that of Societe 
Generate, the bank, in July. 


Finance Ministry al- 
ways maintained that there was 
in feet no saturation effect 
Two-thirds of the privatisation 
receipts have been used for re- 
deeming government debt - 
thereby reducing the call on li- 
quidity in the bond market 
which has otherwise suffered 
from the shift into equities. The 
remaining third goes towards 
capital grants for companies re- 
maining in the state sector, 
thereby, officials say, reducing 


but three times the level of any eminent would put a brake on 
previous year. the programme, even if it would 

have difficulty renationalising 
At the same time, Investors most of the companies so flu- 
have substantially increased floated. If a right wing govern- 
their liquid investments, with meat returned, it would not 
money market mutual funds re- have the same burning need to 
cording net subscriptions of hurry ahead, and could take its 
FFr46bn in the first eight time over the remaining third of 
months of the year and savings the privatisation programme, 
banks at test recovering from .. „ tho 

Jeais of dedimo* de- ^ 

time to digest the new members 
Yet the markets have begun to it has welcomed to its club, 
grow worried at the pace with 
which privatisation *- 


succeeds 


GeoiRa Graham 


Tim Dickson 


KHD looks 
ahead to a 
better year 


WITH THE benefit of hindsight, 
Mr Bodo Liebe’s decisions a few 
years ago to strengthen the posi- 
tion of his compa ny, IQ occfcncr- 
Homboldt-Dentt (KHD). In die- 
sel engines and farm equipment 
seem hopelessly sentimental and 
old fashioned. 

KHD (down from 310 to 478 In 
the European list) had a fool year 
in 1986, with the strong Deut- 
sche Mark tripping it Up in the 


few agricultural equipment l 
kets that still showed any prom- 
ise, and with a worldwide glut in 
diesel engin e pro duction making 
nonsense of KHDs costly produc- 
tion expansion programme. 

Total group turnover fell 11 
per cent, to DM4Jbn, and 7 per 


cent in the parent, to DM3£6bn. 
Incoming orders were down 18 
per cent, and orders at the end of 
the year were 23 per cent down 
on the end of 1985. Diesel engine 
sales fell 12 per cent and agricul- 
tural machinery orders were 24 
per cent lower the a year before. 

The group made an operating 

loss which was, however, evened 
ont by drawing on some hand- 
some reserves. 

The year 1987 will be better, 
though Mr Llebe may not be 
around to tell the story when the 
final figures emerge next year. 
Already aged 63. be is to step 
down early next year as chair- 
man, to make way for Mr Kqjo 
(Karl Josef) Nenkirehen, 45, who 
joined the group this year from 
SKF, the Swedish bearings 
group, whose West German 
operations he ran. 

One of Mr Nenkirchen’s re- 
sponsibilities during his rise at 
SKF was diversification, and 



is planned to sell. 

The recent catastrophic fell 
on world stock markets has 
threatened to turn the Contibel 
deal distinctly sour. Tractebel 
estimated that its share of the 
Contibel operation would work 
out at BFrlObn, more than half 
of which it hoped to raise 
through a one-for-12 rights is- 
sue. But as a result of "Black 
Monday’s" carnage in Wall 
Street and London - and the se- 
vere knock-on effect on the 
Brussels Bourse - the issue has 


has reflected what the board dividends which it earns from 
terms favourable results and an stakes held in other businesses, 
excellent outlook." Holding companies in Bel- 

For the business year ended P"* exercise considerable in- 
Jnne SO, dividends are to be in-' Quence, since even minority 

m, — WU|WV , • — — -- — creased from SFW0 to SFr80 per shareholdings in an enterprise 

the US a laige part of its bank grown in the past three years by bearer share, from SFr35 to f>tten provide effective control- for the buyers after the planned 

- - — '■ ■ ■ - • - — 1 — ~ - • — -^break up, and after the costs of 

financing and tax clearance. In 
the wake of sharp falls in the 
Rvalue of the constituent parts of 
■Contibel, an embarrassing loss 
'could be staring GBL and Trac- 
(tebel in the fece. 

Besides energy, Tractebel has 
an engineering consultancy 
which is considered to be one of 
ihe most important in Europe. It 
fe involved in industrial con- 
struction and technical services 
through its subsidiary Fabri- 
com; and it participates in the 
cable TV industry via a 66 per 
cent stake in COditel. which 
control and operates transmit- 


1! 


Mr Bodo Llebe: stepping down 

ironically - though perhaps this 
Is why he was head-bunted - most 
of KHDs present difficulties can 
be traced back to a decision not 
to diversity. 

It may have been sentiment, 
bat Mr Liebe decided early In the 
1980s that the way KHD would 
grow would not be by moving In- 
to new businesses, bat by con- 
centrating on its strengths and 
by acquiring greater manufac- 
turing potential in diesel en- 
gines, tractors and other agricul- 
tural machinery. At about the 
same time, other West German 
corporations, like Mannesmann 
and Daimler Benz, were doing 
ust the opposite and trying to 
ranch away from their core 
businesses. 

The Llebe strategy, so far, has 
not worked. In 1979, KHD bought 
an old engine plant in Indiana 
from American Motors. The com- 
pany wanted to import and as- 
semble engines. At the same 
time KHD engineers in Canada 
had developed an eight cylinder 
air-cooled commercial dieseL 
KHD Is a world leader in air- 
cooled diesel engines hat both 
efforts flopped. The Indiana 
plantwas mothballed in 1983 and 
the new engine, the "610% felled, 
to catch on in the US, where wa- 
ter cooling was more popular. 
The company, though, was able 
to cushion those losses with a 
DMSOOm pile it had made by tell- 
ing its 20 per cent stake in Iveco 
to Fiat in 1982. That Iveco money 
is still being used as a cushion. 

Mr Liebe, who is tough and 
stubborn, then began to think 
about adding a wa ter-cooled en- 
gine to the KHD range. Knorr 
Bremse, a Bavarian locomotive 
brake group, which also owned 
ihe Motoren-Werke Mannheim 
KMWM), began to break up be- 
cause of quarrelling among its 
family owners. MWM made a 
wide ra nge o f water-cooled die- 
sels and KHD bought it In 1985. 

Soon afterwards, Mr Liebe be- 
lieved he had found another way 
into the American market, 
where other West German com- 
panies had been making huge 
profits while the dollar bad been 
relatively strong against the D- 
mark. Be bought Allis Chalmers' 
loss-making agricultural equip- 
ment group for $IC7m. 

The idea was to use the Allis 
sales and financing network to 
sell KHD equipment made in 
West Germany there, but he had 
missed the currency boom years 
and the rise of the D-mark began 
almost at the same time. 

Earlier this year KHD was 
talking of a "ruinous" price war 
in the US agricultural equip- 
ment market, but first half sales 
•figures proved remarkably 
healthy • down just DMSOOm to 
DM2.1bn from the first six 
months of 1986. .Peter Bruce 



Ayar 


The experience cfCariplo - one qfthe major Italian 
banking groups - Is at your disposal. 
x Its Head Office in Milan. Italy, is linked on-line with over 
- 500 branches; abroad the powerful international 

expansion has taken Cariplo into the most 
strategical^ important financial centres, with 
branches in Hong Kong, London and New York and 
representative offices in Beijing, Brussels, Frankfurt, 
Madrid and Paris bt addition to connections with 
1JS00 correspondent banks. 

Therefore, all over the world, Cariplo’ s assistance 
and services are easily accessible for any type af 
banking, financial and commercial transactions. 

It is logical to trust the competence of a great bank 
which, since 1823, has known how to move with 
the times. 


CARIPLO 

CASSA 01 RISPARMIO DELLE PROVINCE LOMBARDE 


Vfe know how. 

lltit Floor 6 Biahofagate- London EC 2N4BQ 
TeL: 1 2833166 - Telex: 887641 CAWL G 
Fax: 16232519/6219006 


* 





ffinandd^ii 


Financial Times Friday November 6 1987 

THE UK 


THIS YEAR will go down as the 
most extraordinary 12 months 
in recent history for the UK 
Stock market In the first six 
months there was a huge rise in 
share prices, greatly enlarging 
market capitalisations, only to 
be followed by the equally ex- 
treme recent collapse. 

The FT Top 500 list of 
Britain's biggest companies is 
based on market capitalisations 
in mid-August, so today's surrey 
does not reflect the market's 
dramatic turn in October, which 
sent the FT-A All-Share index 
plunging. 

The All-Share, which stood 
around 835 as 1988 turned into 
1967, shot upwards by nearly 50 
per cent to peak at 1238.57 in 
mid-July. It then corrected mod- 
estly downwards and sideways 
oyer the late summer, before 
October's rout 

The advance in the opening 
half of the year was hardly 
unique. The FT-Actuaries 
World Index advanced from 
about 94 at the end of July 1986 
to 131 a year later. Neverthe- 
less, among the major econo- 
mies, London's rise was particu- 
larly marked. 

One of the most important fac- 
tors behind this was the Conser- 
vative victory in the June gener- 
al election. The market had 
begun anticipating this outcome 
early in the year when a string 
of opinion polls showed the To- 
ries way ahead of Labour. 

Added to this was a favoura- 
ble economic climate, with oil 
prices relatively stable, the 


pound firm, inflation still com- 
paratively modest, and the out 
look for growth good by interna- 
tional standards. The major 
worry was a gradual deteriora- 
tion in the current account of 
the balance of payments. The 
generally healthy picture was 
underlined by the March bud- 
get, which saw a fall in basic 
rate Income tax by 2p in the 

pound to 27p and a very modest 
projection for the public sector 
borrowing requirement. 

The upshot of this stable po- 
litical and economic picture, at 
a time of rapidly rising markets 
in New York and Tokyo, was 
that London came to be regard-' 
ed as undervalued relative to 
the international equity market 
- despite the (act that UK price/ 
earnings ratios were reaching 
peaks which had the Cassan- 
dras shaking their heads (and 
with some Justification, given 
subsequent events}. 

But not all sectors shared 
equally in the upward surge. 
The top performer was mining 
finance, buoyed up by the re- 
covery in the gold price. It saw a 
near tripling of its FT-Actuaries 
sectoral index between July 
1986 and July 1987, compared 
with a 55 per cent rise in the 
All-Share. 

The oil and gas index dou- 
bled, thanks to the recovery in 
the price of crude, while pub- 
lishing and printing recorded 
an 87 per cent increase, helped 
by the technological and owner- 
ship changes sweeping through 
the sector. Other strong per- 



OH and poll lifted London 


formers included building ma- 
terials (up 68 per cent}, metals 
and metal forming (72 per cent} 
and overseas traders (90.4 per 
cent). 

Under-performers included 
brewers and distillers (up 36 
per cent) stores (35 per cent) 
and electronics (33 per cent). 
Banks produced a rise of just 
32.6 per cent in their index val- 
ue, though merchant banks,* 
buoyed up by bid speculation, 
tracked the market more close- 
ly with a 50 per cent increase. 

The impact of all these 
changes of market sentiment to- 
wards different sectors Is re- 
flected in the FT 500, and no- 
where more dearly than in the 
sharp rise in the ranking of oil 
companies when compared to 
the 1986 list thanks in large 
measure to the recovery in the 
oil price and partly to acquisi- 
tions. 

British Petroleum has re- 
sumed its traditional position 
as Britain’s largest company by 
market capitalisation. For the 
previous two years it had been 
knocked out of the number one 
position by British Telecom. 
But, whereas British Telecom’s 
market capitalisation grew from 
£13Bbn in 1966 to £L&8bn this 


year, BPS doubled from SlQ.Stm 
to £2L2bn, helped by its buying 
out of minority shareholders in 
its US subsidiary, Sohio. 

Several oil companies which 
have been on the acquisition 
trail also feature prominently 
in list of companies which 
showed sharpest rise in rank- 
ings during the year. 

Newly pzivatisated compa-. 
nles also (feature strongly in this 
year's table. British Gas, which 
was floated towards the end of 
1968. ranks as Britain's seventh 
largest company, with a market 
capitalisation of £8.86bn. The 
Tractor Savings Bank ranks in 
38th position, with a market 
capitalisation of £2Jbn, while 
Rolls-Royce comes in as the 60th 
largest company, capitalised at 
£L64bn, ana British Airway* is 
71st, capitalised at £1.48bn 

Dramatic movement up or 
down the FT 500 is less common 
among the largest companies, 
occupying the leading positions 
la the table, than it isln the low- 
er reaches, where, for example, 
a strong acquisition programme 
under a new chief executive can 
transform a company's size in 
short order. 

Even so, this year's table 
shows some intriguing changes 


it i ranking among the top ZOO 
companies. 

Wellcome, the pharmaceuti- 
cals company, rises from 29 to 
20, partly because of its devel- 
opment of Retrovir, the anti- 
AIDS drug. P &9, which took 
over the - property company 
Stock Conversion in 1988 and 
this year acquired European 
Ferries, moves from 49 to 28; 
while Seed International. the 

S ubliahing group which has un- 
ergone a major restructuring 
over the past two years, rises 
from 57 to 29. Argyll, the stores 
group which bought the British 
end of the Safeway chain back 
in February, moves from 96 to 
42; as British & Commonwealth 
Biddings, the financial services 
group expanding fast under the 
leadership of Mr John Gunn, 
rises from 107 to 62. 

Yet one of the most interest- 
ing upward- movements in the 
top 100 Is that of a company 
which achieved prominence 
this year not so much for mak- 
ing acquisitions but for being 
the subject of a bid. HUdngtou, 
the glass manufacturer, fought 
off a bid from BTR, the industri- 
al holding company at the start 
of the year, in large measure 
thanks to a profits forecast Qat- 


ar met) which was way ahead of 
City expectations. 

Among downward movements 
In the top 100, several retailers 
are prominent, partly reflecting 
the under-perfonnance of the 
sector, but also the aftermath of. 
some oig takeover deals done a 

couple of years back. 

Generally, the companies en- 
joying the largest rises in rank- 
ing are a disparate collection of 
businesses united by one com- 
mon factor -they are expanding 
rapidly through acquisition un- 
der the leadership of strong 
chief executives with a good 
City following. 

The largest jump is enjoyed 
by Rabiera, the jewellery chain 
headed by Mr Gerald Ratner, 
which has been moving so 
quickly that, in June and July, it' 
took the highly unusual step of 
making two concurrent rights' 
issues - for £122m and £82m - to 
fimd acquisitions in Britain and 
the US. It rises 235 places in the 
FT 500 to 179th place. 

CoioroD, which records the 
third largest rise up the table 
(203 places to ZlOth place), is 
headed by 38-year-old Hr John 
Ashcroft, who is building up a 
broad home ftwibhings group 
through a string of takeovers. . 


Mountletgh, which recorded 
the fourth greatest jump In 
ranking (181 places to 139) is the 
fast-growing property group 
-headed by Mr Tony Clegg, which 
has made a string of well- 
judged acquisitions in the prop- 
erty field over the past year. 
More recently, it made a wider 
splash by seeking (but faffing) to 
get Storehouse to agree to be 
taken over and then broken up 
into its constituent parts. .. 

Two of the most audacious of 
filis year's takeover bids came , 
too late to affect th e ran kings of 
.this year's FT 500. WPP, a rela- 
tively small marketing - group- 
headed by Mr Martin Sorrell, a 
former finance director of 
Saatchi .& Saaichi. 'launched 
and won a $560m takeover bid 
for JWT, the large US advertis- 
ing agency. 

Similarly,- Bine Anew, the 
services group headed by Mr 
Tony Berry, launche d Bri tain's 
biggest rights issue - £837m - to ' 
finance his successful bid for 
Manpower, the much larger US 
employment agency. And even 
before these deals the track re- 
cord of the two companies had 
propelled them up t he F T 500 - . 
with Blue Arrow in 215th posi- 
tion and. WPP at 392. 

Their cheeky bids underline 
another important influence on 
this year's rankings - the re- 
markable wave of US takeovers 
by British companies. . 

As for foils in ranking, the 
greatest drop & suffered by 
Systems Designers, the software 
house which caught a nasty cold 


due to delays In the placing or 
Ministry of Defence contracts 
and cost overruns on new prod- 
uct developments. It moves 
down 150 places to 428th. 

The list of companies new to 
to the Ft 500 is dominated by 
privatisation Issues, together 
with a group of large compan ies 
which have been floated onthe 
market over the past year. They 
include Morgan Grenfell, the 
merchant bank; Avis Europe, an 
offshoot of the American hire 
car business; and .Virgin Group, 
the pop music .and entertain- 
ment business headed by Bar 
Richard Branson. . J 

But the list also includes 
some fort growing smaller com- 
panies, which are already listed 
and have battled their way up 
the rankings, either through or- 
ganic growth ox through take- 
overs- They, include Norton 
Opux, the . specialist packaging 
and prin t i Ti g group; Brent Walk- 
ex, the leisure and property de- 
velopment business headed by 
Mr George Walker; Barker & 
Dobson, the : food retailing and 
confectionary group, which has 
been turned round from losses 
by a . new management; and 
WCBS Group, the rapidly ex- 
panding advertising agency. 

Some of the new entrants may 
grow into businesses that chal- 
lenge for the very top rank of 
British companies. ' The prob- 
lem for invertors Is choosing the 
winners from the rest - particu- 
larly in the current turbulent 
market conditions. 

- Martin Dickson 







































[c^jD^i£a 


Financial Times Friday November 6 1987 


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FOOTNOTES TO COMPANIES 
LISTED ON THIS PAGE 

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VSEL Consortium — 

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Bel haven 

Clayform Properties 

Cambridge Instruments 

Sandell Perkins 

Wlbon Bowden 

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— 177 70 

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— 306 6 

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-363 29 

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— 376 9 

— 377 29 

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BIB. 


ParkflHd Group 

Photo- Me International 

Gilbert House Investments*. 

Kennedy Brookes 

Scottish Heritable Trust __ 
European Home Products ~ 
ReacScut Internatkmal^— .. 

Thomson T-Une 

Time Products 


400 6 

401 29 

415 69 

416 29 

419 43 

422 34 

424 35 

426 43 

431 34 


Imperial Continental Gas Assoc- L (U0) 

Exco International — (113) 

Eiimpean Ferried (162) 

Grattan— - (165) 

AE (184) 

StocVley___ (217) 

Auana Group (229) 

Superdrug Stores — (244) 

Extel Group — - (251) 

Wedgwood (257) 

Combined English Stores (279) 

Baker Perkins (280) 

Property Holding & Invest Trust (297) 

British Car Auctions (300) 

Hillards - (306) 

Renishaw (308) 

McConpodafe (312) 

LCP Holdings (330) 

Samuel Properties (347) 

Black (Peter) <355) 

Martonalr International (356) 

Steel Brothers Holdings (357) 

HAT Group (361) 

AB Electronic Products m u m unii (365) 

United Real Property Trust (367) 

Memec (375) 

Land Investors (377) 

London & Northern Giroup (378) 

Bestobell (380) 

Mansfield Brewery (384) 

BeotaKs — - (387) 

Comcap — (389) 

Allied Textile (390) 

NSS Newsagents (404) 

Pewhlrst I. J. Holdings -... (407) 

Johnson Group Cleaners—— (413) 

Hargreaves Group — (415) 

Mitchell Cotts Group .......... (416) 

DubMcr (422) 

PWS International (423) 

Utley F.J.C. (425) 

International Leisure Group (426) 


Boast Massiml PoIUtt,....—. 433 41 

Local London Group 434 S9 

Freshbafce Foods 435 25 

TV-am 436 29 

Yule Catto 437 42 

MBS 446 5 

Bodycote International 447 35 

Yorkshire Television 448 29 

BM Group 449 6 

Wlckei — 450 34 

Ward Holdings — — 451 3 

Countryside Properties 453 3 

Po wir i er t en International 456 6 

Ralne Industries — 457 3 

N.M.C. Investments. 458 31 

Brake Brothers — 461 25 

Reed Executive 462 41 

Goode Durrani 463 70 

Hunting Associated Industries^. 464 6 

Tyndall Holdings 465 70 

Eucalyptus Pulp Mills... 466 31 

Owners Abroad Group 467 29 

Westbury 469 3 

Britannia Security Group 471 48 

Ryan International 473 48 

Southend Stadium- - 477 69 

Lawrence (Walter) 478 3 

Kd lock Trust ■ ■ 482 70 

MTM 483 42 

Marfcheath Securities — 484 69 

National Home Loans - 485 70 

Hughes Food Group — 487 25 

Beattie (James) 493 34 

Connells Estate Agents — 496 41 

Trenchcrwood .... 497 3 

Polyp Ipe .... — 498 2 

Grampian Holdings — 499 43 


CASE Group 

Crown House — 
Howden Group— 
Hartwells Group. 


M (428) 
- (429) 
.. (430) 
~ (432) 


Associated Book Publishers (437) 


Crystalate Holdings (438) 

Mucklow A. J. Group (442) 

Samuebon Group (446) 

Henderson Group (450) 

Horizon Travel (452) 

WatshWs (454) 

Rotaflex ... (455) 

London & Midland Industrials. — (457) 

IVefir (James) Holdings (46 0) 

Macarthy (462) 

Six Hundred Group... (463) 

Town Centre Securities (464) 

SaleTHney (466) 

Dominion International (470) 

Sunlight Service Group — (473) 

Macfarlane Group (Clansman) _ (474) 

Austin Reed Group (476) 

Reno Id ] (477) 

Camellia Investments — — (479) 

Domino Printing Sciences (481) 

Tonstall Telecom Group (483) 

Garfunldes Restaurants (484) 

IBI (488) 

Blackwood Hodge (489) 

Manders Holdings — ... (490) 

Rodime (491) 

Wagon Industrial Holdings^— (492) 

Expamet International (493) 

Smith New Court. (494) 

Associated Paper Industries—. (495) 

HTV Group (496) 

Lynton Holdings- — ..... (497) 

Clark (Matthew) & Sons (498) 

Steel Burrill Jones — (499) 
GEI International (500) 


401-450 


M87*‘ l * l 'l9e6 

401 t-J 

402 <472J 

403 049) 

404 C398) 

405 Q95» 

406 (400) 

407 I40W 

408 (475) 

409 («48) 

410 (471) 

01 ■ am 

412 (406) 

413 070) 

414 060) 

415 (— ) 

416 t — » 

417 013) 

418 044) 

419 (-4 

420 092) 

4Z1 (414) 

422 (-> 

423 (449) 

424 6-1 

425 097) 

426 ( — 1 

427 045) 

428 am 

429 068) 

430 <465) 

. 431 (— > 

432 cam 

433 (— ) 

434. (— 1 


Pboco-Me iMenaUsaal . 

Axon Rubber 

Warn Estate IM*W. 
HcwNihSttflrl PMfl— 

RfflW Enatw. 

■ureWtiHaWax— 

Westland—.— 

Robb—i ( Diu d Bl) Cm 

WcfrfaM n 


Araanm Eirt> 
United Friendly I 
OPCEHoUnw. 
CBret House Im 


DenflfliJ>i XA. — — 

BidnLChwnkabLifl aMMi MBl— — 

Eiopean Hwne Pimte t s - 

Wamfatd tewsmenui ■■ 

ftfafffTTf I mw Bfl 111 " 1 ^ - i l 

Brown BoBflriXretHPWnB i— — 
H— BbT-UM. ■ ■ — 

Hew rehlB . — — 

ftaems Oeslg n ew— — 

fkdayUnw) — - ■■ 

Trktatrol— — 

Tire Prednc ts ■ ■■■ 

Cambridge Bectrtreic IndoMa 

■BflM Masdni) Pon t ... 

LbcU Ltodnn 6roup 

Frorttewe Foods — -■■■■ 

7V-BB 

Yule Cano 

Mmar h/ . HokN H-—— 

CAPCtore— . a ss 

AOd Pt Erore 

ACSResrenfa 

Lnwe Howari-Spb* ft BdB. . 

Einpbd Storey Bradford , 


451-500 


Ward HoSSdBO — 

Vole aw valor— 

Ceonbjdde Properties — » ■ — 

Country 6 Hew Tom Pmm nh i 
H o o Mw owHoWaBS — 
P owoHoro i ii IntenaUore t . 

Brine l u a u a m — 

N.ILC. liW Lfwrntt — .. 

T aaiin VSrffrt 1 * **' 

Trlulty I ate mat Ural HoMldya 

Broke Brother* — — — 

RmlEiMtWNfl. — . .. ' — ■ ■ - 

CooMDurro nt ■— ■ 

HmtNg Assadatad iNtaMes — 
Tyndaa Hokfing — — - 

Earotypus Pip MBs 

OwesAtmUtw fl - . 

WamunR—eAmid — 

W ulNi rr - • 

Brttarwta Sromftg Group — — 
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(-) Hudw Food Cram— 
(444) Sttrel&Sipysafl— — 

(408) Cater ABw HoMtags 

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(451) Pptfl — 

(447) EI5 Group — — 

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(450 MoObs — — 

(480 Wewwap kdm t rffl* 

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(— > 

i_) enwpiHHflUflos— _ 
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Technology 

A strong commitment to the 
advanced technological 
development of products and 
processes, with 2,000 research and 
development specialists working 
in 6 R & D centres in Brazil, France, 
Germany, Italy, the United Kingdom 
and the United States. 


Professionalism 

The highly developed skills of its 
68*000 employees, the modem 
industrial relations schemes, 
continuous training and retraining of 
personnel and labour organization 
systems at foctoty level, represent 
advanced management of human 
resources. 


Internationalism Diversification 


One of the company's basic policies 
since its foundation has been to 
advocate community of interests 
between nations. Today, Pirelli 
operates 1 31 factories in 16 counpies 
in Europe, North and South America, 
Africa and Australia. 


A wide range of products and 
services, from telecommunication 
and energy transmission cables 
to tyres for most applications, 
from motor vehicle and industrial 
components to consumer 
products. 

llRELLI 

Ready for the future. 


K$ay3N<™N WU ,8 ww Scm8eS*«*S*S3 N S$»W***„Su3 W oftSSX8 w SBc8S w S W wS*k$*8SB*£>>-!SSSSM$-»Sfi3S=! 





vra* 


Financial Times Friday Novembers 1987 


European car demand has been at its highest level ever 



Why tyres went flat 


In better shape to ride out the recession 


TUB HUGE size of automotive 
companies, and consequently 
their substantial requirements, 
compared with those in many 
other industries, is reflected in 
the FT 500 lists. 

For example. Jaguar and 
Porsche, which are relatively 
small - in that their annual car 
output equals only a few days*, 
production by the major groups 
- are in the top 400 companies 
ranked by market value. 

Like Jaguar and Porsche, 
Daimler-Benz, the producer of 
Mercedes can and trucks, also 
concentrates on high-value ve- 
hicles. This enables It to be the 
third-largest automotive compa- 
ny in the world by market value 
(alter General Motors and Ford 
of the US), yet its production 
volume is less than one third of 
any comparably sized and val- 
ued vehicle manufacturer . 

Daimler is top of the FT500 
motor industry group and rank- 
ed fourth In the capitalisation 
list It is also the most highly 
capitalised stock on the German 
market, and ranks well ahead of 
Deutsche Bank which effective- 
ly, if not technically, is Daim- 
ler’s "parent* even t rough its 
shareholding is only 233 per 
cent 

Deutsche Bank, Europe’s 16th 
larg est company, according to 
the FT500, has had a profound 
influence on Daimler. It kept 
the vehicles group in German 
ownership, saving it from the 
dutches of Kuwait in 1975 by 
buying shares on offer from the 
Flick Group. 

Most of those shares, today 
representing 25.4 per cent of the 
Daimler issued capital, went in- 
to Mercedes Automobile Hold- 
ing, which is a second way to in- 
vest in Daimler. Kuwait is the 
other major share holder with 
14 per cent 

Deutsche Bank this year 
played a pivotal role in Daim- 
ler’s top management changes, 
which resulted in chairman Mr 
Werner Breitschwerdt stepping 
down in favour of Mr Edz&rd 
Reuter. 

Mr Reuter is expected to give 
the group stronger leadership 
as it assimilates two recent ma- 
jor acquisitions - AEG. the elec- 
tronics and white goods compa- 
ny, and the Dornler aerospace 


UK Profitability FT Top 


Number of companies 

Insurance (Composite) 
Merchant Banks 
insurance (Life) 
Agencies 
Publishing & Printing 
Packaging & Paper 
Building Materials 
Mechanical Engineering 
Brewers & Distfflers 
Conglomerates 
Other Industrial Materials 
Metals & Metal Forming 

Co ntracting . Construdio n 
Trbod Retailing 
Leisure 
Miscellaneous 
Textiles 

Health & Household Products 
Stores 
Property 
Motors 
Electronics 
Food Manufacturing 
Banks 
Overseas Traders 
Telephone Networks 
Other Financial 


7 
9 
9 

15 
11 
12 
20 
44 

16 
11 
IS 

4 

25 
15 

26 
20 
10 

9 

28 

41 

11 

27 

20 

8 

5 
2 

27 

8 

6 
6 

17 

2 

14 


mm wwmm m 


600.1% 

1 


The one German automotive 
company to buck the downward 
trend and to show an improve- 
ment in the rankings is BMW, 
which has been the subject of 
persistent take-over rumours. 


Shipping & Transport 
Electricals 
Insurance Brokers 
Chemicals 



conference In Frankfort last volume producers, while tbow- 
month that automotive stocks ing enorm o us luipimiw u Mwi* -ij 
woe the cheapest in the world, recent years, did not have a pos- 
relative to their past earnings itive cash flow even at the peak 
and cash flow. of the demand cycle. "Thqy will 

The reason they were so enter the next downturn witb- 
Mr Ebexhard von Beunhefan, cheap, he suggested, was that out the benefit of the financial 
the managing director, has con- investors remembe r bow , in reserves built up by thespedal- 
firmed that at one time compa- the early part of the decade and irtprodncia^,"s*ld MrVincenL 
nies "were queueing up to buy in the 1970s, a large number of He emphasised his gloomy 
us. It was no joke." mass producers nearly went message qy adding that the com- 

However, the Quandt flunfly. bankrupt*. According to Hr ing downturn in world-wide de- 
which controls 60 per cent of' Herlis, "the cheapest auto stock maad for can might well be 
BMW, says the company is not in the world" is Volkswagen. worse than the one in U80-8J. 
for sale. Even so, scarcely a However, the same confer- "The combination of global ov- 
month goes by without the gos- ence produced a strong warning ewapadty. a US-led recession, 

— *- from Mr Roger Vincent, mauag- * ~'~ 

ing director of Bankers Trust. 

He pointed out that, while prof- 
itability was important, there 
was another measure of finan- 
cial performance that was 
equally critical In 


on of 


sip 
Fiat, 

enterprise group and wl 
in second place between Daim- 
ler and BMW in the market 

italisat fon l ist, moved 

up the FT50Q table last year, 
reflecting investors’ confidence .analysis of the motor Industry. 


Percentage change 
based on 
pre-tax profits 
June 198610 
June 1987 


Mining Finance 
< 2 a& . Ga ? . 


1—1 I L 


Percent 60 40 20 - 0 +20 40 60 80 


concern. 

Concern about whether Daim- 
ler mb readily cope with Its 
new subsidiaries, and about the 
management in-fighting, played 
some part in Daimler’s d escent 
from second place in the FT500 
list in 1986 to fourth this year. 

But most of the foil in Daim- 
ler’s market value is accounted 
for by the weakness of the Ger- 
man stock market, because in- 
vestors have been particularly 
concerned about the Impact of 
the foil in the value of the dol- 
lar against the D-mark on com- 
panies like Daimler which rely 
on the US to produce a substan- 
tial part of their profit 


Volkswagen and Porsche also 
fell back in the FT500 list be- 
cause of the general lack of 
buoyancy in the German stock 
market, and VW*s image was al- 
so tarnished last year by a fraud 
which cost it DM473m in foreign 
exchange losses. 

VW’s share price has also 
been depressed by the decision 
of the Federal Government to 
sell its 20 per cent shareholding 
in the company. This was post- 
poned to 1988 because of the ex- 
. change fraud, but recently the 
'West German Government said 
the share sale would be brought 
forward and hoped to 
it by the end of this year. 


xn a management team that has 
supervised one of the industry’s 
most remarkable recoveries 
daring the 1980s. 

The Italian company is also 
considerably insulated from the 
impact of the foil in the value of 
the dollar. Unlike companies 
such as BMW, Jaguar, Mer- 
cedes, Porsche, Volvo, Volkswa- 
gen and Saab, which chalked up 
extraordinary profits when the 
dollar was riding high. Fiat’s in- 
volvement in the North Ameri- 
can car market has been very 

However, the dollar’s decline 
has been compensated for to 
some extent by conditions in. 
the 'domestic", European mar- 
ket. 

Car demand in Western Eu- 
rope this year Is running at the 
highest level ever. Talk about 
excess capacity has almost 
ceased, and many companies 
complain that they cannot pro- 
duce enough vehicles. Supply 
and demand are so nearly in 
balance that price cutting has 
eased considerably and mar- 
gins of profit have improved. 

The upshot could be flat ev- 
ery European car producer 
could be operating profitably 
this year - which would be the 
first time this has happened for 
about 20yean. 

Mr Scott Merlls, a vice-presi- 
dent at the Morgan Stanley fi- 
nancial services group, told the 
Financial Times MPtor Industzy 


Biggest profit Increases (UK) 


Biggest profit decreases (UK) 1987 


Rank 

1 

2 

3 

4 

5 

6 

7 

8 
9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 
21 
22 

23 

24 

25 


Company 

Commercial Union 

Guardian Royal Exchange. 
Chloride Group . 

STC- 


Unkxi Discount (London). 
Royal Insurance. 


Barratt Developments . 
Local London Group. 


Tozer, Kemsfey & Mlllbourn . 
Attken Hume International.— 
Sun Alliance & London Insur . 
General Accident. 

WPP Group. 

Tomkins. 

Blue Arrow. 


Smith (David S3. 


Robinson (Thomas) Group. 

WCRS Group 

Amstrad 

Moontleigh Group — , 

Williams Holdings 


BSR International. 

Cannon Street Investments. 


British Printing & Comm. Corp. 
Hill Samuel Group — 




ProfR 





Profit 


Top 500 

increase 




Top 500 

decrease 

Sector 

rank 

% 

Rank 

Company 

Sector 

rank 

% 

66 

69 

59,4500 

1 

Tricentrol....— — — 

- 51 

430 

-1313 

66 

59 

4,0083 

2 

Clyde Petroleum 

_ 51 

369 

-1116 

4 

384 

33000 

3 

Enterprise Oil 

_ 51 

106 

-973 

5 

56 

1377 J. 

4 

London & Scottish Marine Oil 

- 51 

156 

—963 

70 

383 

8810 

5 

BritoO 

_ 51 

67 

-823 

66 

33 

6363 

6 

British Petroleum 

- 51 

1 

-73.4 

3 

189 

5193 

7 


- 51 

119 

-730. 

69 

434 

5000 

8 

United Scientific HoMngs 

- 6 

344 

-683 

9 

292 

4000 

9 

BOC Group 

- 42 

35 

—623 

70 

500 

3880 

30 

Cart ess Cape! & Leonard ..... 

- 51 

266 

— 56j0 

66 

44 

3783 

11 

Mercantile House Holdings— ......... 

- 70 

223 

-443 

66 

41 

364.9 

12 

Northern Engineering Inds— — . 

_ 4 

259 

-42.7 

41 

392 

3500 

13 

Sirdar. — — — 

- 35 

486 

—413 

6 

208 

3060 

14 

Bridon 

- 6 

411 

-37.7 

41 

215 

295.4 

15 

British & Common wealth Hldgs— , 

- 70 

62 

-343 

31 

247 

2903 

16 

Heath C-F , 

- 67 

283 

-303 

6 

408 

2880 

17 

Country & New Town Properties^. 

- 69 

454 

-302 

41 

333 

288.4 

18 

Finlay (James) - 

- 91 

429 

-303 

5 

97 

2723 

19 

BePuwcn 

- 29 

377 

-263 

69 

139 

2653 

20 

Foseco Minsep— 

_ 42 

272 

-24.7 

10 

197 

263.4 

21 

Diploma — ... 

- 5 

353 

-193 

5 

284 

2560 

22 

British Airways 

- 45 

71 

-16.9 

43 

352 

244.4 

23 

AGB Research — 

- 41 

442 

—143 

32 

84 

214.9 

24 

Newarthill — 

- 3 

427 

-133 

68 

169 

2000 

25 

Warnford Investments — — — 

- 69 

423 

-122 


A-Z List of European Top 500 



TM. 

468 
74 

450 
197 

WHs Fiber — ' 231 

Wtfcoo (Conootj) HU®.. 2M 

vM 

Wobdqr 243 

WofacrfenpiM&MKy 2 U 

tu ■ «i U 

maroons 

wpp — an 


Operating cash flow (net in- 
come pins depreciation and 
amortization less capital expen- 
diture and dividends) measured 
the ability of a company to pay 
for its forward needs on a cur- 


inflationary pressures and ria- 
ing protectionism may well 
make the coming downturn ufa* 
on vety serkms proportions,” he 
pointed out 

In general, however; 8» auto- 
motive companies were In bet- 
ter shape to ride out the coming 
recession than the collapse in 
demand five to s ix y e ar s ago. 

Hr Vincent suggested that not 
one of the major aut om otive 
groupings - Europe, Japan or 
the US - had a dear advantage 
over the others in current cir- 
cumstances. "Therefore the win- 
ners win not be one entire 
group over an o ther, but rather 
individual companies that de- 
velop competitive advantage 


THE WEST European ty re in- 
dustxy only recently emerged 
from the long rece ssion which 
caused radical restructuring, 
j winding the disappearance of 
some companies, plant closures 
and thousands of redundancies. 

It has raftered badly from 
self-inflicted wounds, having In- 
troduced new technology- «*w 
belted radial tyres - which 
lasted twice as long as the old 
.erossply types. 

The universal 
speed limits is the 
■rated, the decline in replace- 
ment sales brought about by the 
long-luting radiaL 

At the same time car makers 
modified their tyre policy. After 
years of trying to fit the smallest 
and cheapest tyre to IdgtHvoI- 
« f«^ cars, for economic reasons, 
they began to put longer lasting 
lyres on their vehicles to en- 
hance customer appeal. 

The industry compounde d its 
«ww.r»iK»« by installing extra 
capacity in the 1970s. in the be- 
lief that demand for vehicles in 
the European markets would 
continue to grow at the 7 to 10 
per cent seen in the previous 
decade. For example, Mfchrfin 
built half Us 51 factories world- 
wide after 1970. However, two 
oil crises in the mid-1970s 
slowed growth in vehicle de- 
mand to between 1 per cen t and 


rent basis, be pointed out. 

Looked at this way, only the 

European specialist producers r , 

(BMW, Daimler-Benz, Jaguar, Individual companies de- 3 percent. 

Porsche, Saab, Volvo) had been velop competitive advantage The weaker companies 
able to sustain a high level of over others on the world scene." lapsed first under foe^^sware. 


col- 


cashflow. 

By comparison, the European 


Ke nn et h G o o ding 


Ceat is now controlled 
li, Kleber by Mlcbelin, Semper- 


It by Continental, and Dunlop 
by Sumitomo. 

Eventually the strains affect- 
ed HtehaUn, the French group 
which is Europe's biggest lyre 
maker and second in the world 
to Goodyear. Jgichefin suffered 
losses totalling more than 
FFrSbn in the three years to 
2984. The extent of the reorgani- 
sation needed to poll Uw com- 
pany back to prufiiabil&y mm 
bejudged by the fat that, store 
1982, SGcMEla has reduced its 

world-wide workforce by 2*50 0 
tolMJOOO. 

Industrie Pirelli, fire Italian 
operating company of the lyres 
and cable gnmp, suffered fosses 
for 10 jean to I960, and needed 
a major financial and manage- 
ment restructuring before it 
could return to profit. 

In order to pay off the huge 
debts, the tyre companies have 
frequently resorted to the capi- 
tal markets - Miehelio has 
raised new capital five times 
since 19B2, for example. 

They have been able to raise 
money in spite of befog among 
the most un c omm un ica ti ve c om - 
panies in the world. The indus- 
try has taken its lead from Mich- 
elin, an obsessively secretive 
organisation whose attitude 
ft*”** sot only from concern 
about keeping technical secrets 
but also from the French pro- 
vincialism of its management 
Ffrelli is also a very difficult 
company to analyse, because of 
its complex structure. KG 


Pharmaceuticals 


Catching up with the US 


INTHE 

and industrialists In western 
Europe have worried about 
whether, and by how much, the 
US end Japan may be outsmart- 
ing tbe w wHwMkt iii modern ap- 
plications of science and tech- 
nology. But in one acience 
based industry the concent has 
been muted. If tt exists at afl. 

Tbe pharmaceuticals busi- 
ness is one area in which, by 
world standards. West Europe- 
an countries are extremely 
strong, in contrast to the posi- 
tion In commercial activities 
such as electronics, telecommu- 
nications and factory automa- 
tion. 

to these areas there are con- 
tinual fears about a "technology 
gap* compared with the US and 
Japan, a state of affitizs that has 
led to a nab of government 
technology programmes such as 
the pan-European Eureka proj- 
ect intended to help European 
companies to catch up with the 
leaden. 

Pharmaceuticals has been 
conspicnous hr its general ab- 
sence from tbe Eureka pro- 
gramme. Many of the big Euro- 
pean drags concerns reckon 
they can get along effectively 
enough without join ing in. 

Overall, the CS pharmaceuti- 
cal industry has been the 
world’s strongest for several de- 
cades. However, European con- 
cerns are test catching up, 
while tbe Japanese drags indus- 
try, though big and important 
inside Japan, has yet to take off 
in world terms. 

to the $100bn a year drags in- 
dustry, European concerns oc- 


ty, have come from the ITT* 
luge pharmaceuticals con- 
cerns, which, together with 
Glaxo and IC1, include Well- 
come, Beecham, Smith and 
Nephew and Fisons. 

All three of the world’s top 
selling drags were invented in 
UK laboratories. They are: Zan- 
tac, an anti-ulcer medication 
sold by Glaxo, which in 1966 was 
responsible for sales of slightly 
more than glhn; Tagamet; an- 
other anti-ulcer drug sold by 
Smjtii win* Beckman of the US 
but devised by the company's 
UK research group; and Tenor- 
min, a beta-blocker for heart 
disease sold by KL Sales of the 
last two products last year came 
to gLOlbn and 9713m respec- 
tively. 

Other leading concerns in the 
European drugs Industry cited 
by business analysts include: 
Astra and Pharmacia, of Swed- 
en; Sanofl (France); Sobering 
and EJferck (West Germany); 
Novo (Denmark); and Fazmital- 
laGttalyX 

The exact combination of fa- 
tors that has led to the good Eu- 
ropean performance in pharma- 
ceuticals can be endlessly 
-debated. One of the main rea- 
sons, however, is the traditional 
strength in Europe, particularly 
in Germany, Switzerland and 
the UK, in the key research dis- 
ciplines of life sciences and 
medicine. 

"You can’t look at the drags 
industry in the same way as, say, 
automobiles," says Alastair Kll- 
an analyst at Ark Securi- 
a firm of stockbrokers in 


* , London. *To be successful in 

cupy ®Jght of t he top 20 posi- pharmaceuticals, the key thing 
bons of commies ranked in HTyour ability to disoovernew 
order of sales. They are: 

Hoechstj Bayer and Boehringer 
Mannheim, of West Germany; 

Cflm-Geigy, Hoffknan-La Roche 
and Sandoz, erf Switzerland; and 
Britain’s Glaxo and ICL 

Within Western Europe, Brit- 
ish companies have made rapid 
strides in recent years. Some of 
the biggest growth figures, both 
in terms of sales and profitabili- 


your ability 
drugs, an area where know-how 
is all important" E^rUer this 
century, the existence of highly 
regarded academic institutions 
brimming over with talented re- 
searchers stimulated the start 
of* strong drugs industry. Lat- 
er, these same places fed the 
business with a c o nt in ual 
stream of Ideas and people. 

In pharmaceuticals, research 


and development expertise has 
overriding importances cam- 
with other aspects of 
such as marketing 
(know-how (although tins is not 
]to say the latter is unnecessary! 

• In industries such as elec- 
tronics or telecommunications, 
’a long series of marketing de- 
velopments has to take place 
successfully before a technical 
achievement is translated into 
commercial success. What is 
more, the basic scientific or 
technical discovery behind a 
new product may be difficult or 
impossible to patent Hence the 
company that has made the Ini- 
tial breakthrough may end up 
second best (or even out of the 
race altogether) compared with 

other concerns that latch on to a 
new invention and either devel- 
op ft better or bring it to the 
market-place first 

In the drugs business, the 
path between a key scientific 
advance and a big-selling prod- 
uct is strewn with fewer obsta- 
cles atomwiing from activities of 
competing companies. The ad- 
vance itself is almost certain to 
be patentable, stopping other 
companies exploiting it for a set 
thne, normally 90 years. 

There is, of course, a large 
hurdle, in that before a new 
medication can be prescribed, 
government regulatory authori- 
ties have to be convinced that it 
works effectively and has mini- 
mal side effects. To get a drug 
through these regulatory barri- 
ers can take 10 years and cost a 
total of 9100m (taking into ac- 
count all the projects which are 
started but which never reach 
fruition). 

Nonetheless, these are obsta- 
cles that, to a large degree, are 
the same for all pharmaceuti- 
cals companies. Adi start simi- 
larly disadvantaged in this re- 
spect As a result, research 
know-how can be turned into 
Wozld-class products with Ear 
greater certainty than In other 
areas of science-based Industry. 

Two years ago, a study by the 
Science Policy Research Unit at 


Sussex University attem p ted to 
rank European research capa- 
bilities in industry with those la 
the US and Japan. In areas such 
as aerospace, instrumentation 
and electronics. Europe fered 
relatively poorly; but in tbe 
drop industry the analysis 
placed the continent above the 
US and Japan, in general re- 
search and development capa- 
bilities. and in the ability to aif- 
ftxse scientific knowledge in to 
the commercial sphere. 

One uncertainty for the fixture 
ia the ability of European con- 
cerns to bring to bear new tech- 
niques in the area of biotech- 
nology. a family of methods 
related to molecular bilology 
for producing new drag prod- 
ucts. The methods make it pos- 
sible to produce on an econom- 
ic scale drugs derived from 
materials present in the human 
body, and also to understand 
better body mechanisms that 
are ftzndamental to the develop- 
ment of new medications for 
diseases like Aids or cancer. 

Most analysts agree that bio- 
technology will be of crucial im- 
portance to the pharmaceuti- 
cals industry over the next 
decade, and there are some 
signs that the European Indus- 
try is lagging. 

to Japan, there is a strong gov- 
ernment-directed initiative to 
capitalise on the country's tra- 
ditional biotechnology-related 
strengths in areas such as fer- 
mentation; while, in the US, the 
activities of a number of small 
start-up companies, such as Ge- 
nentech and Genetics Institute, 
have galvanised the drugs in- 
dustry to put its weight behind 
biotechnology developments. 

According to some observers, 
the urgency with which these 
new technologies have been 
■tackled in Europe has been 
somewhat less, though it re- 
mains to be seen whether 
will be a handicap over the next 
10 years. 

Pater Marah 


Top 100 UK Investment Trusts by Market Capitalisation 


'Share- 




Rank 

InvestmentTrust 

- capital 
Em 

funds 

Em 

Discount 

% 

1 


9413 

1,129.9 

8682 

16.7 

172 

152 

236 

233 

2 


720.0 

3 


627.6 

738.9 

7196 

4 


5493 

5 

WH*n - 

5192 

6773 

6 

Alliance- 

5013 

6253 

190 

7 


4973 

6129 

180 

8 

q 


3982 

503.2 

20.9 


395.0 

4710 

163 

lO- 

ll 


363.2 

4513 

196 


3421 

4222 

4000 

190 

14.7 


iai 4 

13 

Fleet «»__ ... . . - 

3292" 

4552 

27.7 

14 


314.9 

395.9 

203 

15 


3020 

357 J. 

202 

16 


— 279.4 

374.6 

25.4 

20.7 

99.9 

17 

18 

19 

20 
21 


97Rft 

351.4 

353-7 


2753 


2676 

357 J. 

252 


2673 

305.7 

123 

90 


2620 

2883 

22 


255 J. 

3216 

20.7 

23 


2503 

291.9 
304 3 

140 


9X9 ft 

25 

26 
27 

TR Trustees Corporation 

— 2383 
9WIU 

28L9 

286.7 

2692 

153 

19.7 

20.4 


"7, ota . 9 

28 

UmIk — __ - . 

207.9 

266.7 

990 

29 

Whitbread 

2063 

2786 

26.0 

30 


195.4 

2340 

160 

31 


182J2 

2130 

140 

32 


181-1 

2143 

156 

33 


1692 

2220 

230 

34 


169-2 

pi 1.9. 

19.9 

35 


1682 

2232 

. 246 

36 


1643 

1933 

15.0 

37 


1563 

188-4 

16.9 

38 


1530 

196-1 

aa..n 

39 


15L9 

1910 

200 

40 

FACPwdflr 

1493 

1923 

222 

41 


149.0 

1760 

153 

42 

Raphura 

1453 

1732 

15-9 

43 


143.7 

1703 

156 

44 

45 

Continental & Industrial 

143.7 

1413 

155.0 

181.9 

73 

223 

46 


1406 

1783 

213 

47 

48 

49 


137 1 

1653 

170 

162 

14.4 


1370 

1632 


1363 

1592 

50 

Kleinwort Overseas ■ ■ ■ 

130.0 

158.7 

182 


Rank 


InvestmentTrust 


51' Romney 

52 Murray Smaller Markets. 


53 

54 

55 

56 

57 

58 

59 

60 
61 
62 

63 

64 

65 

66 

67 

68 

69 

70 

71 

72 

73 

74 

75 

76 

77 

78 

79 

80 
81 
82 

83 

84 

85 

86 

87 

88 

89 

90 

91 

92 

93 

94 

95 

96 

97 

98 

99 
100 


KMnwort Charter. 
Fleming Universal. 
Electric & General. 
English & Scottish- 

Berry 

Tribune 


Crescent Japan 

Fleming American 

TR Natural Resources . 
Edinburgh American - 
Schroder Global — — , 
AHsa 


Brunner. 
GT Japan. 


Fleming Technology. 
Law Debenture Corp. . 
General Consolidated. 


North Atlantic Securities. 
F & C Alliance. 


TR North American. 
Independent 


Metdrum . 

St Andrew. 


London American Ventures . 
British Empire Securities _ 

AMngworth.- ..... ....... 

Majedte....... — ... 

River Plate & General 

“Unresting in Success * 

Murray Ventures 

New Tokyo. 


Fleming Claverbouse. 
Keystone. 


Dundee & London. 
Lowland 


Fleming Enterprise. 


English & International — 

External — i 

Smaller .Companies International 

Gartraore Iw fa rm a tlnn 


Drayton Far Eastern. 
Japan Assets. 


Ball tie Gifford Japan. 

TR Australia-. 

Shires— ~ 


Greenfriar 

London & Strathclyde., 
Northern Securities-*. 


Market 

capital 

£m 

1243 

117.6 
1153 
114.2 

107.6 
107.4 
1053 
105 J. 

103.7 
1012 

- 103-0 

98.9 

93.0 

89.9 
883 

81.9 

80.9 
793 

78.4 
750 

74.0 
730 
720 
713 
703 
683 
663 
643 
630 
61.7 
613 
58JL 

57.4 
563 
563 

56.4 
533 
533 
53 a 
■513 
493 
49 J. 
■44 J. 

42.1 
40.6 
402 
37-3 

37.1 
363 

34.9 


Share- 

holders' 

funds Discount 


Era 

139.7 

134.7 

141.4 

140.4 
1233 
121.6 

115.9 

126.7 
119.0 

133.4 

121.9 
1313 
1140 
102.6 
1063 

107.9 
1003 

86.9 
943 
953 

88.4 

83.7 
883 

793 

84.7 
KL1 
743 
753 

85.4 
722 
693 
701.. 
743 
673 
632 

68.4 
533 

65.7 . 
643" 
39* - 
593: 

60.9- 

55* 
553 . 

55.9 

49.4 

52.4 
46u4 • 
463 


% 

113 

123 

183 

183 

123 

11.7 
9.0 

172 

12.8 

242 

173 

243 
163 
123 
173 
243 
193 

8.9 

17.0 

21.4 
163 
123 
183 
103 

16.4 
153 

10.7 
143 
263 
143 

11.7 
773 
223 
183 
300 . 

17.4 
03* 

158 

373 

fJ> 
133 
19-4 
200 
233 ' 

27.4 
183 
283 
200 
22 0 


’Pre mium 


393 -HO 



1.— . ■ •*. 


have soared to the top 


of the political agenda. 


Duffy and Alan Pike look at the 


steps that are being taken to weld a 
jigsaw puzzle of local initiatives into a 
coherent, national programme for 
regeneration. 

A matter of 


BrIWn’a housing crista: problem 
loo big for potties 
Inner cBy policy: Whitehall In 
charge 4 


Future of tha high street appeal 
of out-of-town 

US can history: retail health in 
San Mateo 

Prone: Traflbrd Park DCs new 
chief executive S 


Scot la n d: no quick answers to the 
problems 

Cardiff: Instead of Tiger Bay 7 
London: docks are only part of tha 


: cx»- v .» 


Urban 





US 


URBAN RENEWAL la critical 
to bringing about a more bal- 
anced use of human and physi- 
cal resources in Britain. . The 
Government has implicitly re- 


cognised that it will not come 
about through die growth of the 
economy as a whole, and it has 
therefore become a matter of 
political priority. 

The- problem spans the entire 
social spectrum, taking in un- 
employment, crime, drug abuse, 
health, education and poverty, 
as well as the immediately visi- 
ble areas of dereliction. The 
very diversity of the problem 
has given rise to a. wide variety 
of responses - some planned 
well ahead, others more imme- 
diate - which generally lack co- 
ordination at the government 
level. 

The very extent of the prob- 
lem p**— "t* a hngn challenge 
to govranmentand other public 
authorities, and to the private 
sector . If-this «« be 

met by the concentration of 
their energies on the pursuit of 
common objectives, there are 
potential opportunities to be 
realised along the lines that 
have been brought Into play in 
some American cities and are 
beginning to be realised In Lon- 
don Docklands. 

But enormous care and pa- 


tience on the part of the guiding 
authorities need to be exer- 
cised to ensure that urban re- 
newal does not simply produce 
concrete monuments in areas of 
farmer dereliction, thereby ex- 
porting the problem of the 
so-called inner city to new ghet- 
tos of deprivation. 

Inner city has become the 
popular term far the problem of 
the urban areas. It is perhaps 
unfortunate, since it ignores the 
fact that some of the areas in 
moat pressing need of renewal 
and refurbishment are not in in- 
ner cities st all, but in the post- 
war hoaxing estates in the outer 
areas of cities like Manchester 
and Glasgow, and the huge 
tracts of land that have been, 
laid waste by the withdrawal of 
industry. 

The policy of governments 
has sometimes exacerbated the 
problem. The new towns, for in- 
stance, which were designed to 
remove people and won out of 
tiie city, inevitably left behind a 
residue of poor housing and 
workplaces In the Inner cities. 
Government grants to help in- 
dustry expand in the assisted 
areas have encouraged this 
movement to greenfield sites. 

On top of this official encour- 
agement, people have increas- 
ingly shown a preference to 


move out of cities. Urban con- 
glomerations like London, (Has- 
gow, and Merseyside have been 


With the exception of London 
Docklands, which is now being 


gow, and Merseyside have been addressed, they are, however, 
losing pop ulatio n sometimes at pockets. It is in the North and 
the rate of 1-2 per cent a year. West Midlands, and In Clydes- 


There are few signs of a rever- 
sal of the trend, except in Great- 
er London, where the most re- 
cent population figures have 
shown a tiny increase. Despite 
the enormous strides that have 
been made over the past 10 
years in transforming the cen- 
tre of Glasgow, the city expects 
that it will have lost 5L3 per cent 
of its 1085 population of 734,000 
by MW. 

The Cambridge Econometrics 
Group -forecasts that this shift 
from city to semi-rural areas 
will continue. It lies behind the 
group’s prediction that East An- 
glia, followed by the South West 
and East Midlands - areas with- 
out large urban conglomera- 
tions - will be the regions of 
population growth be- 
tween now and the year 2000. 

The urban problem has tend- 
ed to be seen as separate from 
that of regional inequality in 
the UK Smaller cities like Bris- 
tol, Nottingham, Leeds - in the 
more prosperous regions - all 
have pockets of deprivation, 
while parts of London have 
some of the worst problems of 
the country 


West Midlands, and In Clydes- 
ide - the former sites of steel- 
works, big engineering plants, 
shipyards -that the scale is mul- 
tiplied. Industrial obsolescence 
has also left its ugly mark on the 
communities of the valleys in 
Wales and in parts of Belfast 

The problem intensified dras- 
tically with the recession of the 
early- 1980s, which took out as 
much as a third of Britain’rin- 
dtutrial capacity, and forced 
the Government to introduce 
new ideas to promote renewal. 
Increasingly, the new schemes 
have been directed at inducing 
the private sector to follow up 
the Government’s pump-prim- 

^Urban development corpora- 
tions - the first set up by Mr Mi- 
chael Heselttne. then Environ- 
ment Secretary, in Docklands 
and Liverpool - are the corner- 
stone of Government policy di- 
rected at restoring the most ex- 
tensive blight 

In Docklands, the policy has 
worked. Some, say that because 
of its proximity to the City and 
the shortage of development 
land in London, it could not 
have failed. It did not look that 


y 

s 




o 


*4 


I cz> 
/fcl 


at p a.^4 


way, however. In the first cou- 
ple of years, when Mr Heseltine 
persuaded a few big private 
housebuilding companies to ac- 
cept the risk- 

One of the major tasks in 
Docklands today is to address 
the social problems of unem- 
ployment and poor hous in g 
which exist side by side with ex- 
citing new pr op er ty develop- 
ments. 

The Mersey Development Cor- 
poration is still waiting to seq 
whether it can succeed in 
breaking through the private 
sector’s rel